Zambia, the Africa’s second-largest copper producer, which had been languishing lavishly from a rapidly accelerating debt levels alongside impacts of a regional drought that was believed to be the reason behind its depressing economic growth momentum, had decided not to replace its value added tax on miners with a previously planned non-refundable sales tax, Finance Minister of the landlocked Southern Africa’s nation with a diverse wildlife, Bwalya Ng’andu said on Friday, the 27th of September 2019.
In point of fact, latest reversal of Zambia’s finance ministry’s decision to scrap sales tax came as a blessing to its mining companies, which had been fiercely opposing the proposal amid a dwindling copper demand in context of a global scale economic slowdown.
On top of that, Zambia’s sales tax plan on miners, which the country’s government had finally decided to scrap on Friday (September 27th), had been a potential conflict of interest between the government and the mining industry over the recent weeks, a critical sector for the Southern African nation’s debt-laded economy.
Nonetheless, as a welcoming move for the mining industry, Ng’andu said in his budget speech on Friday, “Government has decided to maintain the Value Added Tax, but address the compliance and administrative challenges,” adding that he would limit budget deficit to 5.5 per cent for 2020 from a 6.5 per cent this year by cancelling some of the undisbursed debts and ceasing issuance of govt. guarantees.