Liuwa UPND member of parliament Situmbeko Musokotwane says despite the deferred implementation date, Goods and Services Tax (GST) will not work in Zambia because it is unrealistic.
On Friday, June 28, Minister of Finance Margaret Mwanakatwe postponed the implementation of the disputed Sales Tax from July 1 to September 1, 2019, saying government had not yet completed the necessary procedures related to the implementation of the Bill.
But commenting on this development in an interview with News Diggers! Musokotwane observed that people would be forced to pay unjustifiably higher taxes if government went ahead to implement the controversial Sales Tax as prices of most of goods and services would shoot up.
“Personally, I am skeptical about the September date that she (Mwanakatwe) has set to implement the Sales Tax because that is just about two months from now and for people to start using this tax, they must change their computer systems, which means they must procure, in other words advertise and choose the best people to work for them. Then, they will actually need to reconfigure their computers. I also think many of the business people will be caught off guard, so I don’t know why she’s rushing so much! And as a party, we don’t really support this Bill. As a party, we feel that VAT is okay because Sales Tax is just going to make everything expensive, which will not be okay. This tax is not a good one, we would be happier to continue with the VAT,” Musokotwane said.
He observed that government was forcing the Sales Tax Bill in a push to increase domestic revenues.
“PF want this tax because they believe it will raise more taxes. But then, it’s not just a matter of raising taxes, we must raise taxes in manner that is sustainable. Because if a tax is blunt, it forces people to pay unjustifiable higher taxes. If Sales Tax was to go ahead, most things are going to up in prices then you will celebrate and say ‘we are raising more taxes.’ But the question is: are those justified taxes? For me, the answer is no! Justifiable, more taxes would have been more people paying VAT at the current rate without making those who pay to bear a heavy burden,” he said.
Asked if the reasons advanced for the pushing back of the implementation of the Sales Tax by the Minister of Finance were justified, Musokotwane said he believed so.
“Well, the most immediate reason this time is that, obviously, the proposed law needs to be passed by Parliament. So, the consequence of the decision, obviously is that, Parliament has not yet considered the proposed law to introduce the Sales Tax. So, in the absence of Parliament considering and approving the proposal, it means that it could not be implemented on the 1st of July. So, I think that consequence was unavoidable. Now the other reason of course is, if the Sales Tax is going to be introduced at all, it requires Parliament to approve,” replied Musokotwane.