Agriculture

Track illicit tobacco trade – CTPD

By SANDRA MACHIMA
Zambia needs to establish an effective tracking and tracing system for easy monitoring and investigation of illicit tobacco trade, says Centre for Trade Policy and Development (CTPD) Legal Researcher Chileshe Mange.
This she said should come with strong tax administration and improved corporate auditing to avoid losing revenue.
Ms Mange said there had been revenue loss due to reduced domestic excise taxes and that the Zambia Revenue Authority (ZRA) needed to engage the tobacco industry to quantify the revenue and tax losses due to illicit tobacco trade.
She argued that the information provided by international organisations could not be taken as given and should therefore be validated by local statistics.
Ms Mange said according to reports, the government collected far more revenue from imported tobacco products at K904 million as compared to locally manufactured tobacco products at K177 million for 2013-2018.
The major taxes imposed on domestically manufactured tobacco products in Zambia are Income tax and Value Added Tax which account for over 80 percent of tax revenue, she stated.
She said the control of illicit trade in tobacco in Zambia faced a number of challenges but that prospects for progress were also abound.
Ms Mange said CTPD, therefore, recommended that the country needed to develop a clear government position on tobacco control, adding that Zambia was still dragging its feet in passing important legislation, such as the Tobacco and Nicotine Products Control Bill of 2019.
According to the Tobacco Institute of Southern Africa (2016), more than 400 million cigarettes a year enter the market illicitly smuggled, counterfeited or tax-evaded, accounting for 30 percent of the product on the market and in the process losing billions of revenue.

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