- by Ulande Nkomesha on 24 Aug 2019by Julia Malunga on 24 Aug 2019by Natasha Sakala on 24 Aug 2019by Natasha Sakala on 24 Aug 2019
- by Stuart Lisulo on 23 Aug 2019by Stuart Lisulo on 22 Aug 2019by Ulande Nkomesha on 22 Aug 2019by Ulande Nkomesha on 21 Aug 2019
- by Zondiwe Mbewe on 24 Aug 2019by Zondiwe Mbewe on 24 Aug 2019by Joseph Mwenda on 23 Aug 2019by Zondiwe Mbewe on 23 Aug 2019
- Goal Diggers
- by Abraham Kalito on 23 Aug 2019by Abraham Kalito on 23 Aug 2019by Abraham Kalito on 8 Aug 2019by Abraham Kalito on 8 Aug 2019
- by Diggers Editor on 24 Aug 2019by Diggers Editor on 22 Aug 2019by Diggers Editor on 21 Aug 2019by Diggers Editor on 20 Aug 2019
- Guest Diggers
- by Chisoni Mumba, PhD on 17 Aug 2019by CUTS on 4 Aug 2019by Kangwa Muyunda on 3 Aug 2019by Rueben Lifuka on 31 Jul 2019
- Editor's Choice
- by Diggers Correspondent on 24 May 2019by Diggers Reporter on 4 Mar 2019by Andyford Mayele Banda on 29 Jan 2019by Davies Mwila on 22 Jan 2019
- by Diggers Correspondent on 11 Aug 2019by Mukosha Funga on 27 Jul 2019by Mukosha Funga on 21 Jul 2019by Web Master on 27 Jun 2019
Zanaco warns of double-digit inflation on Sales Tax implementationBy Stuart Lisulo on 27 Mar 2019
The Goods and Services Tax (GST) is likely to negatively affect Zambia’s annual rate of inflation and push it to double-digits, averaging between 10 and 14 per cent following implementation, according to Zanaco Plc.
Zanaco Plc’s head of economic research Dr Patrick Chileshe said that the country’s annual rate of inflation will sharply rise into double-digits following its imminent implementation from next Monday.
He also warned that Zambia’s economic growth will equally be affected in view of the uncertainty that the Sales Tax will create once government implements it from April 1, 2019.
Sales Tax is set to replace VAT from next Monday for the first time since it was scrapped by the MMD regime back in 1995.
“I think government has delayed in communicating with stakeholders and have a consultative process. I feel this is going to affect the implementation process, and that could actually have negative implications on the economy. The mechanism of Sales Tax is that you are not paid back the refunds in the process so it’s sticky. What is going to happen is that, we might see prices of goods and services, generally, increasing by far much greater than the rate at which the GST will be implemented because of the cascading effect,” Dr Chileshe told journalists following Zanaco’s Q1 economic review at Taj Pamodzi Hotel in Lusaka, Tuesday.
“Because of that, we might see inflation rising to around 10 to 14 per cent because of the cascading effect.”
Asked whether he may be privy of the expected GST rate, he said speculation in the private sector remained rife.
“At the moment, it is a whole lot of rumours running around! I have heard numbers of five per cent, you tax everything, meaning that there are no exemptions. I have heard numbers of 10 per cent; I have heard a number from certain individuals that the GST will be at 10 per cent exempting food and taxing everything else. But either way, whether you bring it at five per cent taxing everything; you bring it at 10 per cent taxing everything, inflation is going to go up!” he replied.
And data availed in Dr. Chileshe’s detailed presentation revealed that Zanaco have forecast Zambia’s annual rate of inflation to spike the moment GST kicks in next week.
“In 2019, without the implementation of the GST, we expect inflation to remain within single digits. But with the introduction of the GST, we are expecting inflation to be in double-digits for the rest of this year into 2020,” said Dr Chileshe, who added that the GST’s implementation also represented a downside risk on Zambia’s economic growth.
“We have quite a number of risks that is going to affect growth in 2019. And some of these include the fiscal challenges that are ongoing, especially with respect to debt service obligations; what we have seen is that government’s debt service obligations have been increasing and that is essentially having a negative effect on aggregate demand on the demand for goods and services in the economy, and that is going to dampen economic growth.”
Finance Minister Margaret Mwanakatwe, however, has insisted that government will press ahead to implement the controversial GST from next Monday in a bid to avoid processing VAT refunds.
About Stuart Lisulo
Stuart Lisulo is an experienced journalist with a focus on business news.
Email: stuart [at] diggers [dot] news
- Govt willing to discuss “user-friendly” exit for Vedanta – Musukwa - 23 Aug 2019
- If austerity measures were working, we wouldn’t be having these problems – BoZ - 22 Aug 2019
- Kwacha slides back to hit K13 per dollar - 9 Aug 2019
- Don’t stop us, we want to talk about corruption – Zukas - 1 Aug 2019
- Govt should consider emergency cash transfers to counter high mealie meal prices – IAPRI - 30 Jul 2019
- Mwenye's corruption remarks irk PF (3,611 views)
- ConCourt has no powers to hear Bill 10 - Kalaluka (2,577 views)
- If austerity measures were working, we wouldn't be having these problems – BoZ (2,353 views)
- Zesco announces increased load-shedding (1,667 view)
- LAZ warns Speaker, MPs of contempt over Bill 10 (1,371 view)
- KCM opposes Vedanta’s application to disregard in-house lawyer’s affidavit
- Maize dependency will continue making Zambia vulnerable to hunger – Kayula
- High mealie meal prices are an indictment on Lungu – Nalumango
- High Court restrains Tilyenji from acting as UNIP president
- Why was impeachment motion halted if courts have no bearing on Parley, HH asks Matibini
Subscribe For News In Email
The News Diggers
Deputy News Editor
Plot No. Lus/9812/649-MC8
off Alex Chola Road
P.O. Box 32147
Telephone or WhatsApp:
diggers [at] diggers [dot] news
editor [at] diggers [dot] news
Send this to a friend