ZAMBIA – The government of Zambia in seeking to stimulate economic activity and growth in the agriculture industry has set out a raft of proposal on the 2021 budget plan such as increasing import tax on all meat products.

This was revealed by Finance Minister Dr Bwalya Ng’andu during the 2021 budget presentation in Parliament.

“Import duties are just the first step towards fully tapping into the potential of Zambia in feeding itself and the region.”

Zambeef Chief Executive Officer – Walter Roodt.

He stated that the government would increase import duty to 40 percent from 25 percent on agro-products such as beef and processed beef products, pork and processed pork products, chicken and processed chicken products as well as fish imported from outside the Southern African Development Community (SADC) and Common Market for Eastern and Southern Africa (COMESA) regions.

Zambian’s Integrated cold chain food products and agribusiness company Zambeef has welcomed the move highlighting that it will boost and support local production and bring flexibility in the trade.

“Import duties are just the first step towards fully tapping into the potential of Zambia in feeding itself and the region.

“We have been asking for this for a long time; farming will again become profitable,” said Zambeef Chief Executive Officer Walter Roodt.

The country’s leading food producer and retailer also welcomed government proposals to introduce excise duty at the rate of K1.50 per litre on reconstituted milk, and harmonise import duty rates on reconstituted milk with other forms of milk at 15 percent.

The Introduction of excise duty on flat plastic bags at 30 percent was also acknowledged as good for the environment.

The government’s plans to support the scaling up of agricultural productivity through mechanisation were also good news for Zambeef, with the Minister of Finance proposing to zero-rate all tractors for Value-Added Tax purposes. Currently, only tractors up to 90 horsepower are zero-rated.

The Minister further proposed to suspend import duty on importation of refrigerated trucks to support the domestic and export markets. This is aimed at building flexibility and mitigating revenue losses.

News of the Kafue Gorge hydropower project coming online was also critical to Zambeef, which is spending K2 million a month on fuel for generators, plus depreciation and capital costs, due to load-shedding.

In welcoming the Budget, Mr Roodt expressed concern about the bonded warehouses that allow foreign products to be delivered via Kasumbalesa into the Democratic Republic of the Congo (DRC) without duties.

“Zambia is allowing competition from outside SADC and COMESA to freely access local markets via these warehouses, while they do not comply with ZRA prescribed rules. We hope improved tax administration and border infrastructure will deal with it once it gets announced.

“Foreign currency leaves Africa while Africa could locally produce the food. DRC is also deprived of import duties due to Zambia allowing the bonded warehouses to operate with impunity from its territory,” he added.

Other budgetary proposal of the agriculture sector

To provide relief to the horticulture and floriculture subsectors, the minister proposed to increase the number of years for claiming the 10 percent development allowance to 5 years from the existing 3 years.

This allowance is applicable to persons growing rose flowers, tea, coffee, banana plant or citrus fruit trees or other similar plants or trees.

To further revamp the horticulture and floriculture subsectors and to promote other non- traditional exports, it has been proposed to suspend import duty on biological control agents; Remove import duty on greenhouse plastics; Reduce import duty to 15 percent from 25 percent on selected bulb plants and seedlings.

Also, the ministry is moving to reduce import duty on secateurs and pruners to 5 percent from the current 15 percent and 25 percent respectively and import duty on selected agricultural clippers.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE