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New Tax measures already in place

FOLLOWING the assurance made by His Excellency the President, Dr Edgar Chagwa Lungu, during his last address to the nation on Friday 24th April 2020, that the Government had:

a) Decided to waive tax penalties and interest on outstanding tax liabilities resulting from the impact of Covid-19 to assist companies and businesses manage their cash flows during this period; and,

b) Extended the list of medical supplies that are not subject to import duty and value added tax for an initial period of six months to expedite the provision of medical related devices needed to support the fight against Covid-19.

The waiver on tax penalties and liabilities aimed at assisting companies and businesses manage their cash flows during this period of Covid-19, is being implemented by the Zambia Revenue Authority in accordance with the guidelines that the tax authority has since released to the public (check www.zra.org.zm).

In addition, following the pronouncements made by the Minister of Finance Dr Bwalya Ng’andu that the Government had decided to provide businesses with the following tax incentives:

a) Removal of the provisions of Statutory Instrument Number 90 relating to VAT claims on spare parts, lubricants and stationery to ease pressure on companies;

b) Suspension of export duty on crocodile skin;

c) Suspension of import duties on concentrates in the mining sector to ease pressure on the sector;

d) Suspension of export duty on precious metals; and,

e) Suspension of excise duty on ethanol for use in alcohol-based sanitisers and other medical related commodities.

Therefore, to facilitate the foregoing, the Minister of Finance Dr Bwalya Ng’andu has with effect from Monday 27th April 2020, issued the following Statutory Instruments:

1) Statutory Instrument Number 36 of 2020 – The Value Added Tax (General) (Amendment) Regulations, 2020. Statutory Instrument No. 36 0f 2020 shall be read as one with the Value Added Tax Regulations, 2010, the Principal Regulation (in which regulation 9A has been revoked). The Statutory Instrument is aimed at assisting companies and businesses to manage their cash flows during this period by allowing input VAT claim on spare parts, lubricants and stationery.

2) Statutory Instrument Number 37 of 2020 – The Value Added Tax (Zero Rating) (Amendment) Order, 2020. Statutory Instrument No. 37 0f 2020 shall be read as one with the Value Added (Zero Rating) Order, 2014, the Principal Order. This statutory instrument extends the list of medical supplies that are not subject to value added tax for an initial period of six months to expedite the provision of medical related devices needed to support the fight against Covid-19. Statutory Instrument No. 37 0f 2020 is deemed to have come into operation on 1st April 2020 and shall stand revoked on 30th September 2020.
3) Statutory Instrument Number 38 of 2020 – The Customs and Excise (raw Hides Skins) (Export Duty) (Suspension) Order, 2020. Statutory Instrument No. 38 0f 2020, which suspends export duty payable on crocodile skins to free, is deemed to have come into operation on 1st April 2020 but shall cease to have effect on 31st December 2020.

4) Statutory Instrument Number 39 of 2020 – The Customs and Excise (Copper Ores and Concentrates) (Import Duty) (Suspension) Regulations, 2020. Statutory Instrument No. 39 0f 2020, which suspends import duty payable on copper ores and concentrates to free, is deemed to have come into operation on 1st April 2020 but shall cease to have effect on 31st December 2020.

5) Statutory Instrument Number 40 of 2020 – The Customs and Excise (Precious Metals) (Export Duty) (Suspension) Order, 2020. Statutory Instrument No. 40 0f 2020, which suspends export Customs duty payable on specified precious metals (Regulation 2) to free, is deemed to have come into operation on 30th March 2020 but shall cease to have effect on 31st December 2020.

6) Statutory Instrument Number 41 of 2020 – The Customs and Excise (Ethyl Alcohol {Ethanol}) (Refunds, Rebates and Remissions) Regulations, 2020. In exercise of the powers contained in section 89 of the Customs and Excise Act, the Minister of Finance, via Statutory Instrument Number 41 of 2020, has made regulations which will be deemed to have come into operation on 1st March 2020 and will provide for suspension of excise duty on ethanol if solely used in the production of alcohol-based sanitisers and medical related commodities.

For the avoidance of ambiguity, a manufacturer shall not sell or dispose of the goods on which excise duty has been suspended pursuant to these Regulations without the authorisation of the Commissioner General of Zambia Revenue Authority, as long as the authorised user presents supportive information relating to the manufacturing process of the sanitizer.

Statutory Instrument Number 41 of 2020 also provides that the Commissioner General of Zambia Revenue Authority may revoke the authority granted to an authorised user if such user ceases to use ethanol in accordance with authorised terms or contravenes or fails to comply with specified regulations of the Customs and Excise Act.

7) Statutory Instrument Number 42 of 2020 – The Customs and Excise (Customs Duty) (Suspension) (Medical Supplies) Regulations, 2020. Statutory Instrument Number 42 of 2020 suspends customs duty payable on specified medical supplies for an initial period of six months to support the fight against Covid-19. Statutory Instrument No. 42 0f 2020 is deemed to have come into operation on 1st April 2020 and shall stand revoked on 30th September 2020.

CONCLUSION

Yesterday, the Ministry of Finance announced the appointment of a new board for the Zambia Revenue Authority (see Note 2) following the expiry of tenure of service of the previous Board led by Ms. Chileshe Kapwepwe in December 2019. While thanking Ms. Kapwepwe and her Board for the great initiatives made by ZRA during their tenure, the Minister of Finance was emphatic on the need for the new ZRA Board to not only ensure that the provisions of the above listed Statutory Instruments are thoroughly communicated to all stakeholders but also effectively implemented in line with the aspirations of the people of Zambia, through the commitment made by His Excellency The President Dr Edgar Chagwa Lungu, for the Government to cushion the impact of Covid-19 on business and enterprise in Zambia through tax relief and incentives, among other measures.
Issued by:

Fredson K. Yamba
Secretary to the Treasury
MINISTRY OF FINANCE

NOTE 1:

Copies of the above listed Statutory Instruments can be procured (K4) from the Government Printer, P.O. Box 30136, Sadzu Road, Lusaka (Opposite Levy Junction Shopping Mall). Contact phone numbers 0976-863093 & 0977-646664.

NOTE 2:

ZRA Board of Directors

1. Mr. Chiti Bwalya Chairman
2. Mrs. Cecilia Banda Zimba Vice Chairperson
3. Mr. Fredson K. Yamba Member [Representative of Ministry of Finance]4. Mr. Andrew Nkunika Member [Representative of Ministry of Justice]5. Dr. Denny Kalyalya Member [Representative of Bank of Zambia]6. Ms. Getrude Musyani Member [Representative of Law Association of Zambia]7. Mrs. Lydia Sibanda Member [Representative of ZACCI]8. Mr. James Koni Member [Representative of Bankers Association of Zambia]9. Mrs. Grace Bwanali Member [General Public]

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