By BUSINESS REPORTER
ECONOMIC growth this year will be subdued due to escalation of taxes and levies introduced in the 2019 Budget, the Zambia Institute of Policy Analysis and Research (ZIPAR) has warned.
Government has introduced new taxes measures among them the Sales Tax.
ZIPAR senior research fellow, Caesar Cheelo, said economic growth for this year could be subdued and not rebound significantly due to the escalation of taxes.
Mr Cheelo said revising the measures would improve the growth of the economy.
He was speaking in an interview in Lusaka.
“In 2019 we expect remaining in a somewhat subdued debt, growth is unlikely to rebound significantly, among the reasons is the escalation of taxes and levies and non-tax measures in response to fiscal measures that have emerged since 2015 -2016.
“These taxes mean the cost of production will increase and this will increase prices and ultimately increase the cost of living. We have seen companies undertaking other measures not directly related to taxes but those like increasing length of payments for service providers for example the mines who will pay after 90 days.
“So the question is how does these serves providers maintain a positive cash flow and remain in business?” he asked.
Meanwhile, Mr Cheelo commended the Bank of Zambia for containing macroeconomics fundamentals last year such as inflation.
Mr Cheelo also observed that the Central bank in 2018 ensured that speculation which could have impacted on the performance of the Kwacha was eliminated.
“Bank of Zambia did very well in containing inflation and monitoring the exchange rate and ensuring that speculation was eliminated from the market.
“The long term sliding of the Kwacha that we see is had to with exports and imports and we have seen a weakening of our exports recently .These put pressure on us to service the exports,” he said.