By CHIMWEMWE MWALE
GOVERNMENT has proposed to zero-rate bread and wheat for value added tax (VAT) purposes and removed excise duty on some products in various sectors, to reduce the cost of living.
Minister of Finance Alexander Chikwanda told Parliament yesterday that apart from keeping the cost of living in check, the move is also intended to promote domestic production of wheat products and enhance competitiveness.
Mr Chikwanda said during the 2013 budget presentation that the measures will result in a loss of more than K100 billion by government.
?I propose to increase the VAT registration threshold to K800 million per annum from the current K200 million? businesses below this new threshold that have the capacity to meet the necessary accounting requirements for VAT registered suppliers have an option to apply for voluntary registration. Government will save K164.6 billion from these measures.?
He said a standard rate for plastic polymer granules and liquid polymers, synthetic woven bags and block woven bags has been proposed, to promote competition in the production of the products which are currently exempt to tax and that Government will gain K59.6 billion.
Mr Chikwanda said the period within which a tax invoice can be used to make a VAT claim has been reduced from 12 to six months, to streamline tax administration and reduce the risk of tax fraud.
On customs and excise duty, Mr Chikwanda said government has proposed the removal of customs duty on a wide rage of mechanical and electrical machines and tools.
He said the removal of duty has also been extended to medical cameras for surgical examination and other related equipment.
Mr Chikwanda said government has further removed 10 percent excise duty on carbonated drinks and packed water, which will result in affordable drinks.
?This will spur growth in the beverage sector and contribute to the creation of opportunities for forward and backward linkages in the economy and promote employment,? he said.
He said customs duty on locomotives, carriages and rail traffic control equipment has been removed while the measure will also apply to refrigerated fishing vessels, canoes, cruise and ferry boats, among other water vessels.
Mr Chikwanda has extended the move to ambulances and motor cycles and imported modified motor vehicles as provided for in the Persons with Disabilities Act number six of 2012.
?I propose to suspend duty on equipment used for physical exercise, gymnastics and other sports equipment. I am confident that the domestic economy will develop sufficient capacity to manufacture most of sporting equipment. The removal of duty will only be for a period of three years,? he said.
He said the measure has resulted in the treasury putting back K186.2 billion into the Zambian economy.
Mr Chikwanda said tour guide services have also been zero-rated for VAT purposes.
Source: http://www.daily-mail.co.zm/?p=16778
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