THE Zanbia Association of Chambers of Commerce and Industry (ZACCI) has demanded that the tax holiday that Government offers as incentives to foreign firms be extended to local investors as a start-up boost.
ZACCI vice-president north Raj Karamchand said in an interview that several Zambian companies had failed to grow at a desired rate because
they fail to compete with foreign firms who enjoy huge incentives when coming into the country.
He said there are several companies that have come to Zambia and received tax holidays of up to five years and this has helped them stabilise and set out on a growth programme.
"But while this has been happening for foreign firms, it has not been the same for local firms and this has stagnated growth mainly in the manufacturing sector.
Local companies also need the incentives of reduced tax and five-year tax holidays," he said.
Mr Karamchand, who is former chairperson of the Kitwe Chamber of Commerce said, there were several companies, especially on the Copperbelt that had huge potential and ability to grow but were not receiving any incentives to push them higher.
He said the human resource skill levels were also high and that it would be important that Government offers companies with ability and capacity to grow big and challenge foreign firm on the same platform through tax holidays.
He said it was time that the Ministers responsible started to look at local firms as investors that had potential to grow and add to the nation's economy just as much as the foreign investors can.
"In Zambia we import a lot of things that we can manufacture locally, but this will only stop if the local companies get the right
incentives. For example, we have so much timber which we export and we end up importing things like toothpicks and even cloth pegs.
"Companies outside Zambia have turned into multi-billion dollar empires from Zambian timber by making match sticks and other tiny timber products. We can't honestly fail to make these things under the right conditions. We have abundant tropical fruits and we can make juices, jams and fruit salad and even export," he said.
He added that one of the advantages of giving the local investors incentives is that as the company grows, all their profits get to be spent in the country through reinvesting unlike foreign firms who externalise the money.
"Foreign investors take their money out but local investors will keep all their monies inside the country. This would be good because this will mean that there would be more money in our local coffers," he said.
Apart from tax incentives, Mr Karamchand also complained at the tedious process of accessing financial services like loans with high lending rates.
He said getting a loan by small entrepreneurs was such a tedious process that people are made to sign several documents and get heavily scrutinised leading to loss of interest by the time the loan gets ready.