On Tuesday 16th October 2018, the British Chamber of Commerce in conjunction with the Economics Association of Zambia hosted several sector experts, academics, members of the press and other stakeholders at a public forum discussion to explore the 2019 national budget and dissect the proposed introduction of Sales Tax to replace the long standing Value Added Tax (VAT).
VAT over sales Tax
Following detailed presentations and open floor discussions, the general consensus was that Value Added Tax is the more effective tax system compared to the proposed Sales Tax.
However, the meeting agreed that despite having an edge over Sales Tax, the Value Added Tax system was imperfect and needed some fine tuning (such as making supplies to the mines zero rated to avoid the subsequent problem of refunds) to maximise the system’s efficacy.
There were concerns about the cascading potential of Sales Tax and whether it would achieve an objective of widening the tax base. Once details about the Sales Tax system have been created, there will be need to hold another public discussion, hopefully with Government representatives present to help address the above mentioned concerns.
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