The Zambian tobacco industry is seeking the scrapping of the 16% value added tax (VAT) on green tobacco exports ahead of the 2017 marketing season which starts next month.

Government meanwhile assured Zambian farmers it would put measures in place to protect the local industry. The assurance came amid mounting calls by local producers for a moratorium on agricultural imports.

Phonto Mumbi, a consultant in the tobacco industry, said VAT charged on tobacco makes the local industry uncompetitive.

“The VAT charged on locally produced tobacco makes it more expensive than other countries in the Southern African region,” Mumbi said.

He said government should consider giving the local industry a tax status similar to that in neighbouring countries like Malawi and Zimbabwe, where green tobacco products were VAT exempt.

The local industry is wholly oriented for export as there is no local demand.

In another development, minister of finance Felix Mutati and his commerce counterpart Margaret Mwanakatwe, on Tuesday assured local farmers steps will be taken to protect them against the impact of dumping.

‘…government should consider giving the local industry a tax status similar to that in neighbouring countries’

The two ministers did however not give details of the plan to protect the industry against cheap imports.
The move comes after a meeting with representatives of the Poultry Association of Zambia (PAZ).

Veronica Machungwa, PAZ vice chairperson, said government should act to strictly enforce a prohibition on chicken imports.

“We continue to see a trend of chicken pieces being imported into Zambia despite a law prohibiting the importation of chickens that was enacted in 1994. Government must act to protect the local industry,” Machungwa said.

Vegetable producers also called for restrictions on cheap imports which flooded the market.