Zambia delays new sales tax until January 2020

Zambia will delay implementing a new sales tax until January 2020 to allow for further refinement of the law, Finance Minister Bwalya Ng’andu said on Friday.

Zambia, Africa’s second-largest copper producer, plans to replace an existing value-added tax with a non-refundable sales tax, but the move has met substantial opposition from businesses.

Addressing parliament, Ng’andu said he was withdrawing the draft law and would re-introduce it in the next session in September, the ministry of finance said in a statement.

“This will allow for sufficient time to address the concerns in the Sales Tax Bill that stakeholders raised,” Ng’andu said.

Zambia’s mining industry fiercely opposes the tax – just one sore point between the government and the economy’s most important sector.

Since being appointed last month, Ng’andu has sought to mend fences with the miners, with relations deteriorating following tax changes and an ownership dispute over Konkola Copper Mines.

The across-the-board 9% tax on sales of goods and services, originally due to be introduced in April, was intended to help rebalance Zambia’s debt-laden economy.

REUTERS