ZAMBIA – National Breweries says Government’s decision to introduce new tax on opaque beer in the 2017 national budget is likely to discourage tax evasion and help promote compliance.

Minister of Finance Felix Mutati revealed in his recent budget speech to parliament and the nation that excise duty for opaque beer would be modified to include ‘presumptive tax’.

National Breweries, which produces the famous Chibuku brand of opaque beer, had earlier called for enforcement of regulation on illicit practices associated with the selling of opaque beer in bulk because of the risks to public health and the likely non-payment of tax by some unscrupulous producers.

National Breweries corporate affairs director Ezekiel Sekele said the ‘presumptive tax’ to be levied on opaque beer will be an estimate of tax payable based on production capacity, and is often used in dealing with incomes or activities that are hard to tax, such as those in the informal sector.

“We welcome government’s intention to introduce a presumptive tax on opaque beer. This is a good move. It will enhance compliance by the industry players.

Presumptive taxation offers the possibility of reducing tax evasion at low cost and broadening the revenue base,” Mr Sekele said in a statement availed to the Daily Mail on Monday.

Currently, there is already legislation in place which bans the production, transport and sale of alcohol in bulk containers, a practice often related to the distribution of illegally produced opaque beer, but these regulations are often not properly enforced, as demonstrated by the increase in sales of illicit alcohol.

Mr Sekele, however, said currently, Government is faced with numerous development challenges, and is eager to generate more resources from taxation to address various tasks.

December 8, 2016;