Suspending tax on oil meant to empower PF funders

Suspending tax on oil meant to empower PF funders

By Patricia Male

UPND Presidential Spokesperson, Anthony Bwalya says the recently signed Statutory Instrument Number 125 of 2020 by Finance Minister Bwalya Ng’andu suspending VAT on petroleum and diesel effective January 1, 2020 will harm the Zambian people.

Mr. Bwalya has charged that the S.I not only fails to address the biting pump price of fuel for consumers, but it also directly diverts public money away from critical services such as education, healthcare and support for agriculture, channeling it towards the consolidation of political power by the PF.

He feels the offer of VAT relief to essentially only oil marketing companies in order to convince them to import fuel and forestall an impending fuel crisis, without a required increase in the fuel price, is only a short-term remedy.

Mr. Bwalya adds that the VAT relief which should have been passed on to consumers through a reduction in the pump price, is instead going to increase the cost of doing business as ordinary businesses will no longer be able claim input vat, effectively increasing their fuel bill by 16%, with a downstream impact on consumer prices.

Further, Mr. Bwalya notes that this move, which offers no benefit to the public, whilst reducing vat revenues for the government, will have a negative impact on the 2021 budget.

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