ZNFU warns 2027 budget tax proposals could raise farming costs
Nation Reporter
ZNFU warns 2027 budget tax proposals could raise farming costs
Content Type: Free
By BUUMBA CHIMBULU
THE Zambia National Farmers’ Union (ZNFU) has warned that proposed tax increases in the 2027 National Budget could raise the cost of doing business in the agricultural sector and undermine farmers’ capacity to reinvest and expand production.
ZNFU president Zvhikonyo Mahombe said the Union had received the proposed K284.8 billion budget with caution and anxiety, arguing that some of the proposed fiscal measures could weaken agricultural businesses if implemented in their current form.
Mr Mahombe said the proposed increase in income tax from 10 to 15 per cent represented a 50 per cent rise that could reduce the resources available to farming entities for reinvestment, expansion and productivity improvements.
“Farmers depended on their net income to finance operations and improve production, adding that higher taxation could work against the country’s economic growth ambitions,” he said in a statement.
Mr Mahombe said the Union was also concerned about the proposed surtax on imported woven materials used in packaging seed and storing fertiliser and grain.
He said the additional tax burden could increase operating costs across the agricultural value chain.
He further warned that the proposed mobile money transaction levy could affect farmers who rely on digital platforms to pay workers, particularly in rural communities.
“The measure could also discourage the adoption of digital financial services that help improve the delivery and efficiency of agricultural services,” Mr Mahombe said.
On value added tax (VAT), Mr Mahombe said the proposed increase could push up prices as businesses pass on higher tax costs to consumers, potentially adding to inflationary pressures.
However, the ZNFU acknowledged several measures in the budget aimed at supporting local production.
These include restricting Minimum Alternative Tax to businesses that record losses for three consecutive years, imposing duties on imported crude edible oils to support local soya crushing and increasing the surtax on imported processed meat.
The Union also noted the proposed reforms to the Farmer Input Support Programme (FISP), but called on Government to undertake broad-based consultations before fully implementing the proposed FISP loan arrangement.
Mr Mahombe said farmers, whose businesses were central to production, employment and economic growth, deserved similar policy consideration aimed at supporting local producers.
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