Zambia queried ahead of IMF meeting, abandons sales tax

Zambia queried ahead of IMF meeting, abandons sales tax

* That is why PF has suddenly discarded plans to implement the goods and service (sales) tax .

Ministry of Finance and Bank of Zambia contacts have revealed that Zambia will send 19 government officials led by Margaret Mwanakatwe to attend the three days IMF/World Bank Spring Meetings in Washington DC.

Others in the delegation will include Bank of Zambia Denny Kalyalya and Kingsley Chanda Commissioner General of Zambia Revenue Authority.

On the sidelines of the Spring Meetings the Zambian delegation has requested for a meeting to negotiate for a bailout program.

In response, the IMF has told the Zambian government to show what plans it has put in place to reduce its indebtedness and explain how the Sales taxes they plan to introduce will work given its known inadequacies such as creating double taxation.

Our sources have informed us that the response has demoralized the PF government. The worry is that the PF is asking for financial help but the financiers are asking a reverse question on how government will repay its out siding loans.

On Sales tax to be known as goods and services tax Minister washed her hands and for the first time Mr. Chanda has been made to explain his plans.

Consequently the introduction of the tax on 1st April fools day have hit a snag. PF have only today March 28 and March 29 morning to present and pass the bill to make it possible to introduce the the tax. Parliament doesn’t sit on Friday afternoon. Kingsley Chanda in quite corners has been telling people that his Commissioner Finance Bridget Muyenga misled him that if they introduced goods and services tax at 10 percent without refunds they will still raise the required revenue. As of now the plans are that they should introduce a goods and services tax hybrid at 10 percent for domestic goods and 14 percent imported goods. No other country has such an arrangement anywhere in the world. The highest sales tax rate in the world are 6 percent on goods and 10 percent on service (mobile tax time). In Zambia there is already has a 17.5 percent excise duty on talk time.

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