The Cotton Board of Zambia has expressed optimism that the recently introduced five-year tax incentives for local cotton producers and ginners will have a positive impact on cotton production in the country.
The Board believes that the removal of taxes on profits for local cotton producers and ginners over the next five years will lead to better prices and improved services for cotton farmers.
This move was announced by Finance Minister Dr. Situmbeko Musokotwane during the presentation of the 2024 national budget as part of the government’s efforts to unlock the economic potential of the cotton industry value chain.
Dr. Musokotwane detailed the government’s commitment to revitalizing the cotton industry by providing incentives, including a 5-year tax holiday on profits for local cotton seed producers and cotton ginners. Additionally, a 10-year tax holiday on profits generated from cotton spinning and thread weaving was disclosed.
Sunduzwayo Banda, the Chief Executive Officer of the Cotton Board of Zambia, has welcomed these tax incentives, noting that they are expected to enhance cotton production.
He emphasized that the tax holiday is likely to result in better commodity prices for cotton, which will ultimately benefit farmers. Mr. Banda expressed satisfaction that the government has responded to industry proposals to rejuvenate the sector.
He highlighted that a 10-year tax holiday for textile investments will encourage more investment and value addition in the industry.
Mr. Banda encouraged potential investors to seize this opportunity to invest in the textile sector, emphasizing its potential to contribute to job creation and increase income for rural households.
The tax incentives are seen as a significant step towards boosting the cotton industry, improving the livelihoods of cotton farmers, and enhancing the textile value chain in Zambia.