Tobacco Association of Zambia says calls by Centre for Trade Policy and Development (CTPD) for government to increase tax on tobacco by 70 percent will have a negative impact on the manufacturing industry which is already facing challenges.

In an interview with Money FM News, Association Executive Director James Kasongo said “the decision by CTPD is not well researched as 95 percent of tobacco produced in the nation is exported because the country is not a major consumer of the commodity but an exporter.”
Mr. Kasongo said imposing excise duty on the product will make Zambian tobacco uncompetitive on the international market thereby denying the country the much needed foreign exchange.
He added “that the move may increase the cost of production and in the long term cause closure of some manufacturing plants, leading to unemployment.’’

He further added that the sector employees 450,000 people in tobacco value addition and as such, drastic changes in the current tax regime will have a negative impact on the Zambia economy.
Early this week, CTPD appealed to government to increase taxation on tobacco in a bid to achieve fiscal and public health objectives in relation to the commodity.

Tobacco Association of Zambia says it has opposed the position of Center for Trade Policy and Development (CTPD) to increase 70 percent taxation on tobacco because the country is not a major consumer of the commodity but an exporter.

In an interview with Money FM News Association Executive Director James Kasongo said “the decision by CTPD is not well researched because 95 percent of tobacco produced in the nation is exported and imposing excise duty on the product will make Zambian tobacco uncompetitive on the world market thereby denying the country much needed foreign exchange.”

Mr. Kasongo added that imposing excise duty will have a negative impact on the manufacturing industry which is already facing challenges because it will increase cost of production and in the long term cause closure of some plants which will lead to unemployment.
He further added “that the sector employees 450,000 people in tobacco value addition and as such, drastic changes in the current tax regime will have a negative impact on the Zambia economy.

Mr. Kasongo’s comment comes in following CTPD’s appeal for government to increased taxation on tobacco in a bid to achieve fiscal and public health objectives in relation to the commodity.