By CHILA NAMAIKO  –
IN rationalising the tax reliefs, the Government has proposed to discontinue the five-year income tax holidays that is facilitated through the Zambia Development Agency (ZDA)
Unveiling the 2018 National Budget of K71.6 billion in Parliament yesterday, Finance Minister Felix Mutati said, in place of the tax holiday, the Government had proposed to grant accelerated depreciation for capital expenditures by qualifying investments in priority sectors.
The Government has also proposed to remove the allowable deduction for contribution to approved pension funds of K255 per month as there is already relief given at the time one gets their lump sum payment and annuities.
On strengthening  the  tax  base, Mr Mutati  said intellectual property such as trademarks, patents and brands were assets that could be traded.
However, such trades were currently not taxed unlike the case was with other properties such as shares, mining rights and land.
Mr Mutati, therefore, proposed to introduce tax at five per cent on the transfer of intellectual property.
In casting the tax net wider, the Government has proposed to impose a property transfer at a rate of five per cent on the vale attributable to a Zambian asset in cases where indirect ownership or control of a Zambian asset changes outside the Republic.
He said the record of the Patriotic Front (PF) Government in delivering infrastructure to the people was unmatched.
To assist in mobilising funds for the Infrastructure Development Fund, he said Government proposed to introduce excise duty of K2 per 50 kilogramme bag of cement.
The Government in 2004 introduced a presumptive tax for individuals operating public service vehicles based on vehicle sitting capacity.
However, those amounts had not been adjusted since that year, hence the proposal to adjust the presumptive tax rates upwards by 50 per cent.
Mr Mutati said the commissioner general could charge a base tax where there was insufficient information on which to estimate tax payable by a business.
Currently, the base tax is K150 per annum and has remained so since 2008, and the Government has now proposed to adjust upwards the base tax rate to K365 per year.
Mr Mutati also said it was international practice that related parties were treated the same under certain rules such as transfer pricing.
Accordingly, he proposed to mandate all businesses to disclose their related parties for income tax and property transfer tax purposes.
The Government proposed to increase the customs duty on unmanufactured tobacco refuse to 25 per cent from 15 per cent.
Mr Mutati said this would harmonise the tax treatment with all other types of tobacco which are currently attracting a customs duty of 25 per cent.
He said the Government further proposed to introduce specific excise duty on manufactured tobacco and provided for a separate tariff classification for other manufactured tobacco which is currently classified together with cigarettes.
In diversification away from dependence on mining, Government has proposed to remove customs duty on various inputs used in the manufacture of stock feed and fish feed, and exempt unprocessed and semi-processed tobacco from Value Added Tax (VAT).