By Buumba Chimbulu
MINISTER of Finance, Felix Mutati, has unveiled a K71.6 billion 2018 National Budget out of which almost half of it will be financed by domestic revenue following the new tax measures which have since been introduced.
This is an increase of K7.1bn from the K64.5bn unveiled for 2017.
Mr. Mutati explained that out of K71.6bn or 25.9 percent, K49.1bn would be financed by domestic revenues and K2.4bn by grants from various cooperating partners.
He said the balance of K20.1bn of the budget would be financed through domestic and external borrowing.
“Resource mobilisation to support the 2018 budget, is anchored on enhancing tax administration through improved taxpayer services, risk management, enforcement and compliance. This is necessary to ensure that resources are mobilised in a cost effective and non-distortive manner,” he said.
Mr. Mutati proposed to impose a property transfer tax at a rate of 5 percent on value attributable to a Zambian asset in cases where indirect ownership or control of a Zambian asset changes outside the country.
He was speaking yesterday when presenting the plan to Parliament whose theme is “Accelerating Fiscal Fitness for Sustained Inclusive Growth, Without Leaving Anyone Behind.”
Mr. Mutati also proposed to introduce an excise duty of K2 per 50 kilogram bag of cement to assist in mobilising funds for the infrastructure development fund.
Still on taxes, the minister proposed to adjust upwards the base tax rate from to K365 per year from K150 as it had not been adjusted for a long time.
He also proposed to adjust upwards the presumptive tax rates by 50 percent.
“I also propose to remove customs duty in various inputs that are used in manufacturing of stockfeeds and fish feed as well as exempt unprocessed and semi-processed tobacco from Value Added Tax (VAT),” Mr. Mutati said.
The minister also proposed to discontinue the 5-year income holidays that was facilitated through the Zambia Development Agency.
Mr. Mutati proposed to remove the allowable deduction for contribution to approved pension funds of K225 per month as there was already relief given at the time when one got their lump sum payment and annuities.
On non-tax revenue, Mr. Mutati proposed to introduce a landing rights charge of K3, 150 per television channel with less than 35 percent local content while increasing TV levy to K5 per month.