The Zambia Association of Manufacturers (ZAM) has called for the immediate temporal suspension of certain taxes by the government to mitigate the effects that will come with the increase in fuel pump prices.
ZAM president, Ashu Sagar said government should also alternatively think of reintroducing VAT as part of the fuel cost structure where manufacturers will be able to claim it without pushing the pump price up.
He said including VAT in the pricing mechanisms will enable manufacturers and business houses to claim it back and ultimately this will lower distribution costs.
“The Pump price will remain what it is but will enable us as manufacturers to claim it back on the import cost of fuel,” he said.
Mr. Sagar said what is pushing commodity prices up are not just production costs but also distribution which he added is triggered by every rise in fuel prices.
Mr. Sagar said consumers must understand that it’s not the desire of manufacturers to see them spending a lot of money on products but that having different commodities on the shelves comes at a cost which, in this case will go up because of the fuel pump price increase.
“We are living in very difficult times, we have external factors that are obviously impacting the cost of oil on the international market, and this has to do with what is happening in Russia,” he said.
Mr. Sagar said the 16 percent VAT that was claimable is no longer part of the cost structure but that having it back will be a sigh of relief to the consumer, unlike now where the cost is heaped on them.
Mr. Sagar added the war in Russia coupled with the weak performance of the Kwacha against the dollar, the increment is justifiable but that government should also ensure stabilizing the exchange rate.
The ZAM president said the mining has for the past three years been absent from the foreign exchange trade floor and has been paying all its taxes in dollars direct to the treasury.
He said there is a need to find a mechanism that will allow the mining industry to be a participant in the free market of foreign exchange in Zambia to allow a stable supply of foreign exchange.
Mr Sagar said there are gaps in the supply of the United States dollars where players need to wait for the allocation of foreign exchange for days.
The Energy Regulations Board-ERB adjusted upwards fuel pump prices by K4.54 to K4.68 and K3.93 per litre for petrol, diesel and kerosene respectively.
These PF mwenye stoogies need to be cleaned from such sensitive positions -what are the odds that no wonder there is no Black manufactures cos these PF stoogies ve locked such industries to themselves alone-do your research. There is also one at Bus association and the the HoneyBee is also the same breed. They are importing plastics from there own countries and dumping them in Zambia leaving the indigenous with no Manufacturing experience due to exclusions. You canot have a Pakistan/Lebanese being in charge of a Taxi association – come on! A lebanese being a president of manufacturing in Zambia? Can you as a Zambian be in charge of manufacturing in Pakistan or India? The same i think goes to Oil procurement, these stoogies filled all the roles there, Procurement of Medicine too, Yes we…
DIESEL IS VAT CLAIMABLE AT 90% OF TOTAL VALUE
NOT PETROL SO WHAT IS WRONG WITH THAT ?
LETS NOT BRING WHERE A PERSON IS FROM INTO THIS !!
IF THEY TO HELP AND FOR THE GOOD OF ZAMBIA I SAY WELCOME
REMEMBER SOME OF US ZAMBIANS HAVE DONE VERY LITTLE FOR THIS COUNTRY EXCEPT FILL OUR POCKETS
Ashu Sagar is intelligent. For fear of being victimised by new doom thugs, he has chosen to use consumers to send his message.
Bwana Ashu, ba upnd baliba staboni kwati bwamba pa 4am. They will never improve this economy. Any filling station for upnd supporters which is selling petrol at New doom price.
Foreign investment to anz country is crucial. It does not matter who the manufacturer is – foreign or local, what is vital is having regulations in place to manage, monitor and enforce laws. In business is, does a manfacturer pay tax that is due to him/her? Government should have economic policies in place that are inclusive for all and that contribute towards the country’s development and benefit for the citizens.
For instance, does a foreign manufacturer create employment and adequately contribute towards Zambia’s fiscus? Government should then put such income through tax to good use to develop the country by building infrastructure, enhance hospitals, schools, housing etc.
VAT on the other hand is good and bad for business as this requires to be closely regulated as there…
Zambia to flourish requires clear laws, policies and regulations in place and enforce such. Ultimately a well-managed Zambia would reap good benefits for itself and its citizens. It is really so simple.
This man is talking about claiming back VAT when Govt was failing to pay it back and some smart Global companies especially miners where abusing the system!!
If I was a commerical farmer in Zambia …I would make my own bio-diesel from used cooking oil on my farm just tell a few Fast Foods Takeaways not to throw away their used chip pan or deep fryer oil. In the UK food distribution companies process this and used it for their fleet of trucks although they pay a tax to govt for doing this.
comment is awaiting moderation
^^^ Tarino a regular blogger on here and you still cant choose your words wisely
or know how to disguise them
I’m baffled
The only f00ls singing praise for upnd even when it is clear that things are bad are not even in zambia. These f00Is are all abroad and are not experiencing what we here in zambia are going through. Some of them have not visited zambia for decades because they have not legalised their papers there abroad so they cannot risk travelling and being deported or not allowed to go back to diaspora. They are frustrated illegal immigrants.
@tikki, tarino is just as dumb as you
The govt needs to remove the middlemen from fuel acquisition. Why can`t we import fuel from our neighbour Angola.
@ Imposter
We are stating facts and not sitiing in some small room blogging trash
Ashu Sagar points that VAT does not exist where it is claimable via the ZRA.
If for instance, Sagar buys fuel at K2m for his company, the fuel bill system does not state how much vat is at 16% in figures. Invoices are mostly issued with subtotals and gross totals, the difference in the totals is the claimable vat.
But our K2m here still does not show the price of vat: whether it is vat exclusive or vat inclusive.
However, I don’t agree with him when he says the mines do not participate in FX because they pay directly to the treasury.
Mines have monthly bills to handle where they have to sell their forex to pay up, making them perpetual FX partners and spinners.
Since KCM and Mopani are parastatals for some time, it is expected of them not to pay taxes; but revenue must be…
KCM and Mopani being parastatals, it is expected of them not to pay taxes; but revenue must be deposited in the BOZ, which to Sagar is why the dollar is so scarce. Isn’t the central bank in charge of monetary policy?
Kagem, Kalumbila, Kansanshi are some other viable mines operating beyond the 3 years Ashu is talking about. Instead he should have talked about benefiting from tax holidays some miners enjoy which can incentivised manufacturing too.
Has he forgotten that govt suspended duty for 3 months on edible oils last year? That rebate has since expired and cooking oil fetches K300 – 400 per 5 litre pack today.
The cost of business is high and the already high cost of energy makes manufacturing more disastrous to venture.