Business News

Thu, 13 Apr 2017 10:51:56 +0000

Govt urged to abolish unnecessary investor tax incentives

By BUUMBA CHIMBULU

GOVERNMENT should abolish unnecessary tax incentives for companies that end up depriving the country of revenue needed for economic growth, the Zambia Tax Platform (ZTP) has suggested.

ZTP coordinator Kanguya Muyunda said certain tax incentives deprived the country of the much needed revenue which could be channelled to economic sectors.

“There is need to abolish unnecessary tax incentives and create empirical data supporting or not supporting tax incentives which is causing us to lose significant amount of revenue, more especially in the mining sector, which is heavily incentivised,” she said.

Ms Muyunda said at the Civil Society Organisations (CSOs) meeting in Lusaka that sectors such as mining were exempted from withholding taxes on the dividends they paid to shareholders.

She explained that if mining companies made larger profits in future as copper prices recovered, then the revenue effect of the tax break would increase.

Ms Muyunda also said there was need to create a multi-stakeholder steering committee comprising of State and non-State agencies to oversee tax incentives.

“This will promote strong monitoring of these incentives and there should also be parliamentary oversight in the management of these incentives,” she said.

She also called on Government to develop an investment policy which will consist of an incentive policy framework to clearly guide the process of investments in the country.

She said there was need for Government to develop an investment policy which would consist of an incentive policy framework to clearly guide the process of investments in the country.

And Centre for Trade and Policy Development (CTPD) acting executive director, Isaac Mwaipopo, said there was need to strike a balance between tax incentives and benefits passed on to citizens.

Mr Mwaipopo observed that citizens might be deprived of the benefits at the expense of luring investment in the country.

“We have noticed that in the process of trying to lure investment into the country, there has been promises made to offer incentives which indicated that the environment will be conducive for them to feel secure as they invest.

“There is need to strike a balance and ensure that we gain. Besides from attracting investment, we also have as a nation an obligation to ensure that the needs for our people are fulfilled,” she said.

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Cost reflective tariffs must be balanced – Chabala

By BUUMBA CHIMBULU

THERE is need to strike a balance when increasing electricity tariffs otherwise the measure will kill the manufacturing sector as the cost of production will go up, says Zambia Association of Manufacturers president, Rosetta Chabala.

Ms Chabala said although it was unavoidable to have cost reflective tariffs, it was also important to ensure that the adjustment was done in a manner which would not kill the manufacturing industry.

She was reacting in an interview to the announcement by ZESCO that it plans to increase electricity tariffs by up to 75 percent soon and the Energy Regulation Board is currently undertaking a consultative process over the matter.

ZESCO’s plans for cost reflective tariffs have already been approved by Government.

“We have to appreciate that it is inevitable to have tariffs that are cost reflective and no one is objecting to that, but we have to be cognizant of where the manufacturing industry is and what it is that we actually need to do to increase production. “While we appreciate why Zesco would want to increase the tariffs for investment, we also would not appreciate tariffs that will kill the industry; so we need to strike a balance,” she said.

Ms Chabala said manufacturers were currently categorised in the maximum demand 3 (D3) and demand 4 (4) of the tariff and were already paying high prices, hence the need for consideration.

She expressed concern that industries may shut down if the increase was exorbitant as they would not be able to afford, thereby affecting the economy.

“If you look at what the mining are paying and what the general public is paying, the cost of consumption should be higher than the production side because consumption is a luxury which anyone can sort out,” Ms Chabala said.

“But for production you need to be effective, efficient and ensure that you are competitive in the region,” she said.

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Taxpayers need education, says Appeals Tribunal

BY MAILESI BANDA

ZAMBIA has a low propensity to fulfill tax obligations mainly due to minimal taxpayer education, Tax Appeals Tribunal chairperson Fraser Chishimba has said.

Mr. Chishimba said it had been observed that generally people had a challenge of remitting taxes in Zambia.

He said this was mainly attributed to minimal taxpayer education by relevant authorities and the general reluctance by individuals and corporate entities to meet these legal requirements.

“Given the low tax morale, the frequency of tax disputes has increased. Some of these disputes arise not because the basis of the computation is incorrect, but rather the amount due is perceived by the taxpayer as being high,“ he said.

He said the tribunal would collaborate with relevant stakeholders to sensitize the public on their right to appeal when they were dissatisfied with the determination of the Zambia Revenue Authority (ZRA) commissioner general.

He said there was need for increased tax education of the business community and the general public.

He cited corruption as a vice that had detrimental consequences on the ability to collect sufficient tax revenues.

Mr Chishimba explained that loss of revenue could be attributed to corruption as individuals deliberately avoided paying what was due and instead made smaller payments to grease the hands of tax officers in order to facilitate reduction of their tax liabilities.

He said while the fight against corruption was a collective effort there was need for the fight to be championed by people from all walks of life.

He said the tribunal would play an effective role in efforts to eradicate corruption. This would be done through the sensitization of taxpayers on ethical behavior.

He appealed to taxpayers to meet their tax obligations as required by law.

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Lusaka woman wins K100m Zambia Sugar draw

By MAILESI BANDA

CONSUMERS play a vital role in the growth of a business and as such there is need to ensure that they are taken care of, Zambia Sugar Company chairman Fidelis Banda has said.

Mr Banda said as a result Zambia Sugar would continue to provide quality products to Zambians and the export market.

Speaking during the ‘‘Beula’’ White Spoon grand draw in Lusaka yesterday, he said the importance of interacting with consumers through promotion could not be over-emphasised.

The grand prize of K100 million was won by Doris Chitowa of Lusaka.

Mr. Banda said Zambia Sugar was interested in human capital development.

“As Zambia Sugar we are proud that we are making a difference in the ordinary lives of our people and I wish to assure our stakeholders, especially the communities, our customers and the consumers, of our unwavering support to community development,“ he said.

He advised the winners of the competition to carefully think through how they will use their money. And Zambia Sugar managing director Rebecca Katowa said the recently launched US $80 million sugar refinery had contributed to the growth of production.

“We recently commissioned a new refinery which is an USD80 million project aimed at increasing our production capacity and meeting different and competing customer and consumer demands,” she said.

She said the company would continue to invest in world-class technology and state of the art infrastructure to enhance quality of products and increase production.

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BAT to build $20m tobacco factory in Lusaka

BY MAILESI BANDA

BRITISH America Tobacco has made an investment of about US$20 million in a cigarette manufacturing plant at the Lusaka South Multi-Facility Zone (LS-MFZ).

British America Tobacco managing director Godfrey Machanzi said the factory would be equipped to manufacture for the local market, adding that there was potential to grow the production of tobacco to meet the export market.

Speaking during a press briefing in Lusaka yesterday, he said the factory would create 40 permanent jobs and about 600 people would be employed during the construction stage.

“We will be setting up a factory with an investment of about US$D15 to 20 million which will be constructed at the LS-MFZ and it will be equipped to produce for the local market,“ he said.

He said the project was meant to build the capacity of the manufacturing industry in Zambia and contribute to the training of skilled workers.

The 40 permanent workers that will work in the factory would undergo training to enable them operate the machinery and produce quality cigarettes.

He emphasised that the workers would be Zambians as the company believed in empowering the locals.

“As much as we are adding value to the economy by investing in the factory we are also adding value to the human resource by offering them training,” he said.

He commended Government for providing an enabling environment for business growth, adding that the investment was due to the policies that favoured the growth of the private sector.

“We commend the Government for providing an enabling environment for the growth of the private sector without which we would not have been able to make the investment we have done,“ he said.

He said the official ground-breaking ceremony would be on 18th of April at the Lusaka South Multi-Facility Zone.