NOMSA NKANA, Lusaka
GOVERNMENT has been urged to consider introducing 25 percent customs duty on trailers from regional economic blocs to boost domestic investment in the manufacturing of trailers.
Zambia Association of Manufacturers (ZAM) has made a proposal that Government should introduce customs duty on trailers from Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA).
The measure will strengthen not only the tax base of the government but will also increase domestic investment in the trailer sector, which will have a multiplier effect on the economy.
ZAM trustee Sajeev Nair said this during a presentation at the ZAM 2018 national budget consultative meeting last week.
“Trailer manufacturers in Zambia continue to face unfair competition from imported products coming from neighbouring countries. We therefore recommend introduction of 25 percent customs duty on trailers from SADC and COMESA and also 30 percent import duty from other countries,” he said.
In the 2017 national budget, Minister of Finance Felix Mutati introduced a five percent surtax, which is an additional tax on something already taxed, such as a higher rate of tax on incomes above a certain level.
But Mr Nair said while ZAM supports the introduction of the surtax, there is need to ensure that only those products and inputs not sourced locally remain part of the special goods surcharge (SGS) list.
He said ZAM will therefore submit a list to the Ministry of Commerce, Trade and Industry and the Ministry of Finance of raw materials and inputs that should be excluded.
“This issue needs to be resolved as a matter of urgency as a number of goods that fall under this tax, are also inputs into manufacturing processes,” he said.
Meanwhile, Mr Nair said the slow pace of infrastructure development is making some firms disinterested in setting up in the multi-facility economic zones (MFEZ).
He said, for instance, lack of factory shelves has made firms that are supposed to provide support services to the main industry in the MFEZ reluctant to set up businesses.