2020 Budget Weighs in at K106 Bn Chamber of Mines Calls for New
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K10 BusinessThe Post - 31 Dec /1/4/JS (6 X 2)/1May The Right To Do Business Vol:1 Issue #021 E-mail:[email protected] www.businessweekly.co.zm 30 SEP - 6 OCT 2019 GOV’T CLIMBS DOWN ON PROPOSED SALES ….VAT maintained amid fears of GDP drop, job losses TAX overnment’s his 2020 budget speech that stakeholders, which in- proposal to re- in the face of wide-ranging cluded the cascading ef- introduce Sales concerns from several key fect, negative impact on Tax next year to sectors, government will GDP growth and job losses Greplace the current Value maintain the current VAT through elimination of in- Added Tax (VAT) to boost and address its compliance termediaries in the supply domestic revenue mobiliza- and administrative chal- chain,” he said of the pro- tion has been reversed. lenges. posed Sales Tax. Minister of Finance Dr. “A number of concerns Ng’andu told parliament in were raised by various Page 2 2020 budget weighs in at K106 bn By Prudence Chota he 2020 national and external financing. undersubscriptions on gov- Budget has in- The minister has proposed ernment securities auc- creased by K19.2 to spend K44.1 billion for tions and the depreciation billion represent- General Public Services of the Kwacha against the Ting, 32.4% of Gross Do- with notable expenditures United States dollar which mestic Product (GDP). under this category being contributed to higher than The 2020 national budget K33.7 billion for debt ob- programmed external debt Chamber of Mines calls for has increased to K106.0 bil- ligations and K2.3 billion service payments. lion compared to 86.8 bil- for dismantling of arrears “For this Budget to lionannounced in the 2019 to unlock the much needed achieve its objectives, it new tariff blueprint national budget by former liquidity in the market. will require us to deliver on By Staff Writer Finance Minister Margaret He has however admitted our commitments with dis- Mwanakatwe. that budget implementation cipline, determination and he Chamber of needs a joint approach to elements of making Zambia Finance minister Bwalya has faced various chal- dedication,” he said. Mines has pro- growing the mining indus- competitive was stability in Ng’andu said of the total lenges despite the positive Further, Dr Ng’andu said posed that energy try, based upon a shared the tax and royalty regime; budget, K72.0 billion repre- performance of revenues Government will reduce tariffs be inflation understanding that through stability in major costs such senting 22.0% of GDP, will and grants at K42.8 billion borrowing from the domes- Tlinked for the next 3 years growth – and only through as electricity or fuel; and come from domestic reve- exceeding their target by tic market to 1.1 percent of until the cost of service growth and industrial devel- stability in labour. nues while the balance will 9.1%. GDP from 1.4 percent of study completes, Chamber opment – can we be raised through domestic The challenges include GDP in 2019. Page 2 President Goodwell Mateyo deliver more,” said when sharing proposals said Mr Mateyo. made to the 2020 budget. Commenting Mr. Mateyo called for a on the Chamber’s Trade deficit scales up tariff evolution roadmap to submissions, be agreed with the full par- First Quantum ticipation of industry and Minerals’ head 42% for August ZESCO to understand its of government ambia’s trade August, meaning the coun- Central Statistical Office working capital, restructur- affairs John deficit has de- try imported more than it (CSO) Interim Statistician ing and financing needs. Gladston said the creased by 42.5% exported in normal terms General Mulenga Musepa. “Ultimately, Zambia most important Zfor the month of despite the decrease, says Page 3 The right to do business Business & Finance30 SEP - 6OCT 2019 The Business Post Gov’t climbs down on proposed Sales Tax By Prudence Chota overnment’s pro- interfacing it with the customs of the Government Service posal to reintroduce system so that claims of refund Bus and Payment Gateway to Sales Tax next year for import VAT paid to Cus- ensure interface with ZRA; to replace the cur- toms Services during import of -Ensure timely audits of Grent Value Added Tax (VAT) to goods are verified; VAT claims, including out- boost domestic revenue mobi- -Enforce the use of Elec- sourcing services of external lization has been reversed. tronic Fiscal Devices (EFD) forensic auditors. Minister of Finance Dr. for VAT and other tax types Among a raft of other Ng’andu told parliament in and facilitate accreditation of changes, Dr Ng’andu said cap- his 2020 budget speech that in additional EFD distributors ital equipment and machinery the face of wide-ranging con- and Virtual EFD software sup- for the mining sector would be cerns from several key sectors, pliers; zero rated. government will maintain the -Ensure the capture and Also, claims of VAT on con- current VAT and address its electronic transmission to sumables such as stationery, compliance and administrative ZRA of the Taxpayer Iden- lubricants and spare parts will challenges. tification Number and name be disallowed. However, this “A number of concerns were of both buyers and sellers will not apply to businesses for raised by various stakeholders, of goods and services in all which these consumables are which included the cascading business-to-business and busi- stock in trade. effect, negative impact on GDP ness-to-Government transac- The finance minister also growth and job losses through tions; proposed to limit input VAT elimination of intermediaries -Improve data analysis and claims by mining companies in the supply chain,” he said of streamline bulk data matching on diesel to 70% from 90% the proposed Sales Tax. with institutions such as the and input VAT claims by min- On the heels of this reversal, Patents and Company Reg- ing companies on electricity to the finance minister spelt out istration Agency, Ministry of 80% from 100%. the following measures to bol- Lands and Natural Resourc- Earlier, the Zambia Cham- ster enforcement and efficien- es, NAPSA, ZESCO and the ber of Mines had warned that cy of VAT: Zambia Public Procurement introduction of sales tax to re- -Upgrade the tax online Authority. place the current Value Added Minister of Finance Dr. Ng’andu system for domestic taxes and -Accelerate implementation Tax (VAT) would severely af- fect the mining sector. 2020 budget weighs in at K106bn Ng’andu pencils in K2.3bn By Prudence Chota for reducing arrears By Staff Writer he 2020 national undersubscriptions on gov- allocated K636.0 million Dr Ng’andu has allocated Budget has in- ernment securities auc- towards redemption of the K1.1 billion for investment overnment has loans,” he said. creased by K19.2 tions and the depreciation Eurobond, K135.0 million in energy power infrastruc- increased fund- Dr. Ng’andu also said in billion represent- of the Kwacha against the towards voter registration ture to diversify and boost ing for disman- order to address the chal- Ting, 32.4% of Gross Do- United States dollar which and other election related the electricity generation tling of arrears lenge of domestic arrears, mestic Product (GDP). contributed to higher than expenditures and K100.6 capacity and to increase Gby about K2.2 billion, the government will increase The 2020 national budget programmed external debt million for any unforeseen access to electricity in ru- highest increase in the his- the allocation of funds to has increased to K106.0 bil- service payments. and unavoidable expendi- ral areas, he has allocated tory of the nation. reduce the stock of do- The allocation increased mestic arrears; use of debt lion compared to 86.8 bil- “For this Budget to tures while K100.0 million K166.3 million to the Rural to K2.3 billion in the 2020 swaps to liquidate part of lionannounced in the 2019 achieve its objectives, it has been allocated to the Electrification Fund. budget from K437 million the outstanding arrears en- national budget by former will require us to deliver on compensation Fund. In the education sector he in 2019 while K33.7 billion hance commitment control Finance Minister Margaret our commitments with dis- On Economic Affairs, has proposed to spend total has been allocated for debt systems to curb further ac- Mwanakatwe. cipline, determination and the Minister has proposed of K13.1 billion in 2020 in- obligations. cumulation. Finance minister Bwalya dedication,” he said. propose to spend K21.8 crease access and improve Further, government will “The external debt stock Ng’andu said of the total Further, Dr Ng’andu said billion under Economic the quality of education and reduce borrowing from the as at end-June 2019 in- budget, K72.0 billion repre- Government will reduce Affairs function of which skills training at all levels domestic market to 1.1% of creased to US$ 10.23 bil- senting 22.0% of GDP, will borrowing from the domes- K10.6 billion is for road out of which K7.0 billion GDP from 1.4% of GDP in lion from US$ 10.05 billion come from domestic reve- tic market to 1.1 percent of infrastructure, K1.1 bil- has been allocated to pri- 2019. at the close of 2018,” he nues while the balance will GDP from 1.4 percent of lion for the Farmer Input mary education and K2.2 Fiscal deficit is projected said. to reduce to 5.5% of GDP in “This was mainly on ac- be raised through domestic GDP in 2019. Support Programme and billion to secondary edu- 2020 from 6.5% in 2019. count of disbursements on cation while for university and external financing.