Economic Expert Warns of Policy Contradictions Affecting Zambia’s Export Market
Economic expert Mr. Kelvin Chisanga has raised concerns over conflicting policies impacting Zambia’s export market, particularly the contradictions between Rule 18 and export proceeds tracking directives.
Mr. Chisanga explained that Rule 18, established by the Zambia Revenue Authority (ZRA), ensures that Value Added Tax (VAT) maintains neutrality in international trade. It allows exporters to avoid VAT payments while also providing for input tax refunds.
However, he noted that export proceeds tracking directives, enacted separately to regulate export activities, have created inconsistencies that challenge the sector.
“It’s imperative to recognize that Zambia’s export market is facing difficulties due to conflicting policy elements. While Rule 18 prevents exporters from paying VAT, the implementation of export tracking measures contradicts its provisions, impacting tax incentives within the regional market,” Chisanga stated.
He further highlighted disparities in taxation, pointing out that importers are taxed similarly to domestic suppliers, often at lower rates than exporters. This, he said, places exporters at a disadvantage, especially when factoring in exchange rate fluctuations.
Despite these challenges, the mining sector has shown resilience and strong growth potential this year. “The sector remains a key driver of the economy, supporting local forex inflows and contributing significantly to national revenue,” Chisanga said.
However, he warned that Zambia could face a tougher business environment, with tax rates potentially increasing instead of being adjusted to stimulate growth. “For us to achieve sustainable economic progress, we need to revisit some policies and align them with the country’s growth prospects,” he concluded.
