DUTY ON CEMENT TO SUFFOCATE CONSTRUCTION SECTOR

Mon, 16 Oct 2017 13:41:26 +0000

By Mailesi Banda

THE proposal by the Government to introduce an excise duty of K2 per 50 kg bag of cement will affect investments into infrastructure development, Zambia Association of Manufactures, (ZAM), president Rosetta Chabala has observed.

Ms. Chabala said the Government’s intentions to introduce a specific tax of K2 for every 50 kg bag of cement had the potential to discourage investments into the construction sector as it would trigger an increase in the price of cement.

Speaking in an interview with the Daily Nation, Ms. Chabala said since Zambia had seen a boom in the construction sector it was time for the Government to take advantage of the boom and attract investment in the sectors that produce construction materials.

She explained that while it could be understood that Government was committed to ensuring the tax base grew since the 2018 national budget would be mainly funded domestically, it was important to consider protecting the construction sector as it was still in its infancy.

“The exercise duty on the bags of cement will suffocate the growth of the construction industry which has seen some development in recent years, but with the additional taxes we hope this sector is not negatively affected, “she said.

She explained that the measure will lead to an increment to the price of cement which will counter the consumer gains from increased investments and competition in the sector and eventually led to a reduction of construction projects.

She further said the measure would discourage growth in the construction sector and lead to loss of existing jobs and potential jobs.

She added that it was therefore important that government considered reversing the proposal and replace it with measures aimed at encouraging growth of the construction sector.