By BUUMBA CHIMBULU
GOVERNMENT should consider extending policy stability in form of taxes to the manufacturing sector, the Zambia Association of Manufactures (ZAM) president Ezekiel Sekele has said.
He said this would ensure effective domestic resource mobilisation, especially in the tobacco and edible oils industry.
Mr Sekele said the extension of such provisions would be beneficial towards the domestic resources mobilisation agenda set in the 2020 National Budget.
Commenting on Government’s proposal to maintain direct tax rates as a safeguard to disposable income, Mr Sekele said the measure should be extended to other struggling sectors as it would support business operations.
He was speaking yesterday during ZAM submission on the implications of the 2020 National Budget to the Expanded Parliamentary Budget Committee chaired by Mbala Member of Parliament, Mwalimu Simfunkwe.
“Considering the burdening cost of doing business and the tight liquidity conditions, the maintenance of direct tax will support business operations.
“However, there is need to ensure maintenance of such provisions over the medium term to allow domestic producers adapt to tight economic conditions and grow their capacities,” Mr Sekele said.
Policy stability, he said, ultimately generated considerable gains for Government revenues through increased Value Added Tax and Corporate income among others.
Mr Sekele explained that policy stability such as in the clear beers had generated considerable growth in the subsector.
This, he said, had seen its expansion of investments to agricultural sector such as cassava production.
“Considering this situation, the extension of such provisions to other struggling sectors, such as edible oils and tobacco sectors will be beneficial towards domestic resources mobilization,” Mr Sekele said.
Government in the 2020 National Budget expects to raise K106.0 billion, with K53.8 billion will be raised from taxes, K18.2 billion from non-tax revenues, and K3.1 billion will come as ODA.
In addition, domestic financing accounts for K3.5 billion while K27.5 billion will be sourced externally.
And commenting on the 2020 budget proposal to increase the specific excise duty rate on cigarettes from K240 per mille to K265 per mile, Mr Sekele said there was need to ensure other costs and fees d-d not compound this increment and erode the benefits to the emerging sector.