Govt prodded to increase scrap metal export tax to 35%

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BUUMBA CHIMBULU writes

GOVERNMENT should increase export tax on scrap metals to 35 percent to protect Zambia’s steel manufacturing industries which are currently booming.

The current export tax of 25 percent has not curtailed scrap metals export to protect Zambia’s steel manufacturing industries and yields a minimal tax from this booming business, says Jesuit Centre for Theological Reflection (JCTR).

By increasing export tax to 35 percent, JCTR explained, exports of metal scrap would be reduced and or revenues would increase from metal scrap exports.

This is contained in the JCTR Proposals for the 2021 National Budget Submission to Ministry of Finance.

The Ministry of Finance is currently in the process of receiving proposals from stakeholders for next year’s national budget.

“There are large volumes of metal scrap materials being exported from Zambia to neighboring countries yet Zambia too has industries that should be using these materials.

“The country loses out by exporting scrap rather than processing these and adding value internally. Increased revenue,” JCTR said.

JCTR also proposed for the introduction of a 30 percent tax on foods classified as unhealthy foods and beverages along with subsidising foods that promoted  good health, such as fresh fruits, vegetables, nuts, fish and fiber.

According to JCTR, obesity related diseases and premature death resulted in lost earnings, leading to lower tax revenue.

The Centre explained that such also increased the demand and cost of health care spending.

A tax on fatty foods, JCTR said, increased the cost of unhealthy foods thereby reducing demand and plays a role in reducing obesity levels.

The Centre stressed that a higher tax would also encourage producers to supply foods lower in fat and sugar.

“Further, such a tax would contribute to raise revenue which could be used to offset other taxes as well as subsidizing nutritious foods. “A flat tax would not be regressive if other regressive taxes are reduced the overall impact on equality should remain unchanged,” JCTR said.

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