2 October 2017

Zambia: ZAM Hails Broadening of Surtax Items

The Zambia Association of Manufacturers (ZAM) has welcomed the proposed extension on the number of items on which surtax applies as this will encourage production and promote the local industry.

This will also apply on the removal of raw materials that were erroneously put on the surtax schedule.

ZAM executive director Chipego Zulu said the move by Government would encourage production and promote the local industry going forward.

She said this after Finance Minister Felix Mutati presented the K71.6 billion 2018 national budget to Parliament on Friday , that the removal of customs duty on inputs that are used in manufacturing was a major win for the sector.

"We received that five per cent surtax that actually inputs in our manufacturing processes.

It made our products more expensive so we are happy with the responsiveness of the Government with regards to the surtax, we are happy with the call to extend the number of products on the list and to remove those that currently can be sourced locally, this will encourage production and promote the local industry," Ms Zulu said.

She further said in terms of tax incentives, the support towards agro processing, the removal of customs duty on the production of fish and stock feeds and the exemption of unprocessed and semi processed tobacco would improve the lives of the players and the people at large.

"I think we have definitely seen a number of measures in support of agro processing, the production of fish and animal feed, tobacco industry as well, which ultimately improves the lives of the farmers in the tobacco sector.

"We expect to see some improvements also coming in from cigarette manufacturing which happens locally," she said.

Ms Zulu further commended the minister for exhibiting continuity in the way he presented the budget from last year to the 2018 budget.

"We are happy with the way the budget has been presented, we have seen the high level of continuity in the way the budget has been presented. On the high side, I think we have seen a high level of continuity in the way the budget was presented last year and the way it has been presented this year.

"We are also happy that our major concern with regards to further increment of electricity to the Manufacturing sector is being addressed by the fact that government is undertaking a cost of service survey which will inform the process of further increment in electricity.

"That provides some sort of space for the sector to adjust to the current level of tariffs but aside from that we have seen some pronouncements talking about increasing the operations in the MFEZs and addressing some of the challenges that we had as local manufacturers, so that's a welcome move," she said.

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