Cabinet has approved for publication and introduction in Parliament, of “The Sales Tax Bill, 2019”.
This was after President Edgar Lungu called for the 8th Special Cabinet Meeting at State House held yesterday, at which two substantive legislative matters were discussed.
In a statement issued to Money FM News, Chief Government Spokesperson Dora Siliya says the objectives of the Sales Tax is to introduce a sales tax on the supply of goods in the Republic on manufacturers, producers, distributors, wholesalers and retailers and the importers of goods into the Republic.
Ms Siliya says the other objective is to impose sales tax on the supply of services in the Republic by service providers and importers of services into the Republic.
She says this tax policy will also exempt certain supplies, imports and exports of goods and services from tax.
“Cabinet is of the view that the proposed Sales Tax is also aimed at stopping the escalation of VAT refunds, dating back 2009, estimated at K17.9 billion as at 9th January, 2019. The VAT refunds have greatly negatively affected the economy and, therefore, the Sales Tax is the best way forward for the country,” she said.
She further said the introduction of the Sales Tax will enhance domestic revenue mobilisation by broadening the tax base and simplifying administration as well as compliance processes.
“The Bill shall be introduced in Parliament on Tuesday 2nd April, 2019, Friday 2nd April, 2019 and after final approval by Parliament during the June sitting, the effective date as announced by the Minister of Finance is 1st July, 2019,” she added.
The Chief Government Spokesperson says Cabinet in line with the approval of the Sales Tax, also approved a consequential Bill, The Income Tax (Amendment) Bill, 2019.
Ms Siliya stated that the objective of the Bill is to revise the turnover tax threshold from K800, 000 per annum to K500, 000 in order to harmonise it with the Sales Tax threshold.
“The enactment of the Sales Tax will have an effect on the Income Tax Act, Cap. 323 as the turnover tax threshold of the Income Tax (Amendment) Bill will be five hundred thousand kwacha or below, per annum. Once a tax payer exceeds this threshold, they will become liable to pay Sales Tax in respect of taxable supplies,” she said.
Meanwhile, Business and Financial Analyst Blessings Kafwanka has observed the need for tax payers to be compliant even as the government transits from VAT to Sales Tax.

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