Zambia defers implementation of controversial tax

LUSAKA, March 29 (Xinhua) -- The Zambian government on Friday deferred the implementation of a controversial new tax to allow for more consultations.

During the presentation of the 2019 budget, Minister of Finance Margaret Mwanakatwee announced the government's intention to replace the value added tax with sales tax, which was supposed to come into effect on April 1, 2019.

That announcement, however, received a backlash from stakeholders, who say it will increase the cost of doing business.

In a statement, the finance minister said the implementation of the tax has been pushed to July 1, 2019, to allow for more consultation.

She said significant progress has been made and that a draft bill has been concluded and will be presented to parliament for the first reading on April 2, while the finalization of the bill is expected to be done by June.

"During the intervening period, the bill will undergo further stakeholder consultations through the parliamentary committee and interaction by the ministry of finance with different economic players. This being a new law, we do not want to leave any stone unturned," she said.

Mwanakatwee defended the government's decision to introduce the tax, saying it was part of the reform process aimed at addressing the challenges of unpaid valued added tax refunds, a situation that resulted in the accumulation of huge arrears.