. Sakulanda

By KENNEDY MUPESENI –
THE Government should reduce borrowing and keep the public debt within sustainable levels in 2016, the Zambia Chamber of Commerce and Industry (ZACCI) has said.
ZACCI expects the Government domestic borrowing to remain at the barest minimum so that the private sector is not crowded out from the financial system.
This is according to the tax proposals by the chamber, which were made available to Times of Zambia yesterday.
ZACCI president Geoffrey Sakulanda said in the submission that the external debt that was being contracted should go to intended programmes such as infrastructure development that had the potential to grow the economy in the long run.
“The Government must spend only within its means. If the expenditure has to be increased, measures must be put in place to increase the resource base by broadening the tax base without stifling the growth of the sources of Government revenue,” Mr Sakulanda said.
He called for improved transparency and accountability by speeding up the implementation of Integrated Financial Management Information System (IFMIS) to enhance transparency and accountability and reduce misuse and abuse of public funds.
This would enhance revenue mobilisation and ensure that all revenues are put to the intended purpose.
Mr Sakulanda said that recently the private sector had suffered fluctuations in exchange rates, load-shedding, high energy costs and high cost of finance.
To facilitate the growth of the private sector and overall economic growth, he wanted the monetary policy to continue focusing on maintaining single digit inflation which would guarantee a stable exchange rate.
To mitigate the loss in revenue due to inflation, ZACCI has proposed that annual increases to the cigarette excise duty rates be indexed to forecasted inflation for the next three years through to 2018 and reviewed in three-year intervals.
Based on current levels of inflation, the chamber has further proposed that excise duty increases to K103 per 1,000 cigarettes in 2017 and K110 per 1,000 cigarettes in 2018.
Mr Sakulanda also looks forward to Government to make necessary amendments to the Customs and Excise Act.
This should include more stringent penalties for non-compliance to the tax stamp legislation and guidelines for importers, distributors and manufacturers of cigarettes on tax stamp reconciliation.