HH Advises Govt to Ditch Sales Tax

UPND president Hakainde Hichilema has advised the PF government to abandon its proposal for the General Sales Tax meant to replace the Value Added Tax.

Hichilema, an economist, has stated that the Sales Tax was difficult to implement compared to the VAT which he says has several benefits such as promotion of savings and investments, among others.

“There are those of us who believe in the efficacy of Value Added Tax (VAT) as a fairer consumption tax for logical and technical reasons. When correctly implemented, VAT is likely to have a higher positive impact on the economy and society as a whole. In particular, the benefit of VAT lies, among others, in its ability to promote savings, capital formation and investment which is essential for economic development, jobs creation, business opportunities, social uplift and poverty reduction,” Hichilema stated.

VAT is a tax whose possible negative effect on low income earners can be mitigated through appropriate tax credits/allowances. VAT is a tax which is relatively cheaper and easier to collect than some other taxes such as the PF proposed General Sales Tax (GST). We advise that PF should drop/not implement their unwise and inappropriate idea of replacing VAT with GST.”

He considers the Sales Tax punitive, saying it will hurt households and result in reduced collections by the Treasury.

“As we have argued before, GST is penal, more costly and difficult to collect. Overall, the GST introduction is likely to result in the Treasury collecting less tax revenue to support health, education, food security and other social services. GST will therefore hurt households, the general citizenry, savings, businesses ( small/medium/large companies which will lead to further business closures and consequently more job losses). Without doubt, GST will slow down even further the already declining economic growth,” stated Hichilema.

“PF’s poor leadership has already caused so much damage to our country and people’s lives. As such and for once, PF should listen to our sound advice for the good of our economy and people.”


The post HH Advises Govt to Ditch Sales Tax appeared first on Zambia Reports.

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