Editor's Comment

2019 budget lays more ground for growth

MINISTER of Finance Margaret Mwanakatwe presenting the 2019 national budget. PICTURE: MACKSON WASAMUNU

ZAMBIA is on the rise.
The country’s economy is one of the fastest growing in Sub-Saharan Africa. The evidence is there for all to see.
The country is undergoing rapid transformation in all sectors of the economy, with roads and real estate taking centre stage.
Some donors have started downscaling their aid to the country, with countries such as Denmark, Netherlands and Norway closing their missions.
This is because our country has taken off.
Going by our country’s natural resources endowment, Zambia should have already attained middle income status.
However, our tax system has not been efficient, thus the heavy dependency on donors for the development of the country.
But time has come for the country to start mobilising resources domestically to meet the country’s developmental needs.
In fact, Norway and other donor countries dedicated a lot of their time building the country’s capacity in collecting enough taxes locally.
Norway worked tirelessly with the Zambia Revenue Authority to ensure the country benefitted from its mineral endowment through the introduction of mineral royalty tax.
It is, therefore, gratifying that Government has come up with measures in the 2019 budget to mobilise more money locally.
Speaking when she unveiled the 2019 National Budget, Minister of Finance Margaret Mwanakatwe brought out several revenue generation initiatives.
These include taxing the construction of shopping malls following the removal of customs duty rebates.
Other revenue measures proposed are the increase in excise duty on plastic bags to 30 percent from the current 20 percent and the increase of duty on powdered milk to 15 percent from the current five percent to curtail misclassification.
Mrs Mwanakatwe announced the increase of customs duty on used and retreaded tyres to K5 from K3 to reduce the use of used tyres to curb accidents.
A new tax regime will also be introduced on casino, lottery, betting and game to allow better regulation of the industry.
Mrs Mwanakatwe said casino live games will be taxed 20 percent of gross takings while casino machine games will attract 35 percent tax.
Lottery winnings will attract 35 percent of net proceeds, betting at 10 percent of gross stakes and gaming at K250 to K500 per machine per month.
The current 20 percent casino levy will be abolished.
Strengthening domestic tax collection is essential to enable Government to come up with sustainable revenue streams to finance the treasury and develop the country, as well as service the social sector and cushion poverty.
Generating enough resources domestically will guarantee the State a reliable income for growing the economy as there will be sustainable revenues.
The long overdue domestic revenue collection represents tax reforms which Government should have embarked on a long time ago.
We, therefore, commend Government for the tax reforms in the budget which represents 28.9 percent of the gross domestic product (GDP).
Domestic revenues will account for 64.6 percent, while only 2.2 percent support will come from cooperating partners.
We also commend Government for its proposal to cut down on domestic borrowing because it will help build the capacity of corporates from which it has been borrowing to enhance economic activities and grow the economy.
It is a budget that facilitates economic growth in pursuit of middle income status by 2030 as set in the Seventh National Development Plan.




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