”CONSIDER CONSULTATION ON SALES TAX”

By Vincent Matandiko and Josephine Banda

The Policy Monitoring and Research Centre (PMRC) has urged government to open consultations with stakeholders to address concerns before the implementation of the Sales Tax in April next year.

The Centre has said the success of change of tax regime has only been successful in countries where consultation had been done to avoid resistance.

This is according to the 2019 budget analysis which explains key aspects of the Budget in all the five pillars of the Seventh National Development Plan signed by PMRC Executive Director Bernadette Deka.

Finance Minister Margaret Mwanakatwe proposed the transition from Value Added Tax (TAX) to Sales Tax in terms of reporting and compliance during her presentation of the 2019 budget address to the National Assembly under the theme” Delivering Fiscal Consolidation for Sustainable and Inclusive Growth”.

The Centre noted that government needs to provide a detailed transition plan from VAT to Sales Tax and the range of goods and services that will be subject to the new sales tax and the process to de-register from VAT and register for sales tax.

Other details that need to be availed include input tax credits and exemptions and how the ongoing VAT audits and enforcement activities will be handled.

The PMRC also called for the rolling out of IFMIS to ensure that no expenditure is done outside the budget.

“There is need to fully roll out this software suite to all government spending agencies. We have also been advocating for review of the Public Procurement Act to enable benchmarking of prices for routine goods and services that are procured to ensure uniform prices. This is indeed welcome and long overdue. Government is the most abused by suppliers where overpricing of goods and services is concerned leading to revenue leakages,” the PMRC stated.

The Centre also called on government to enforce and improve public finance management to curb the misuse of public resources by ensuring that all spending agencies adhere to budget provisions as stipulated besides strict financial management at all levels.

 

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