So the choice was simple for three of Zambia’s professional bodies. Host one post-budget event on the day that Dr. Bwalya Ngandu delivered his maiden budget speech to parliamentarians. This would save the Minister some fuel in these times of austerity not to mention save the man’s voice as he had admittedly choked up during the 2-hour long speech (his first he admitted jokingly).
ZICA, EAZ and ZACCI (Accountants, Economists and Commerce) hosted a gala event that brought together professionals and industry captains to one black-tie event where they could all get a candid listen to the Minister of Finance and what his belief system was when coming up with and delivering the K106 billion Zambian budget.
The budget came exactly two weeks after the President of Zambia had opened this current session of parliament with a state of the nation address (SONA) that signaled the extent of Zambia’s debt burden and the impact of climate change.
The two talking points were omnipresent in Dr. Ngandu’s speech as he signaled their impact on sectors such as agriculture and energy which until recently has been must talked about in the public domain following the national utility’s measures of power preservation through load management.
The biggest comfort for the private sector was the final nail being put into the Sale Tax coffin. For weeks many had speculated what decision the new minister would make regarding the contentious Sales Tax which had vehemently been rejected by various key stakeholders of commerce and industry due to the cascading effect that it posed. Until recently, the Chamber of Mines had issued a stark warning of the consequences of proceeding with a new tax regime as it posed more of a danger to the business value chain of many industries, apart from mining.
When Dr. Ngandu took to the podium after being ushered on by ZICA President and Managing Partner of KPMG Jason Kazilimani, the audience received an honest and candid confession from the Minister. He admitted that following his ascension to the Finance Ministry helm, he had consulted with his peers at Ministry of Commerce and they hated Sales Tax. Therefore, the decision to either continue with something that clearly would have its own issues and something he felt he did not own or discontinue and fix the VAT problem was simple. Death to Sales Tax. The look on ZRA Commissioner General Kingsley Chanda following this announcement was priceless. For obvious reasons.
“There is no perfect tax, anywhere in the world”, the Ministry said to a nodding audience who breathed a sigh of relief at the Minister’s honesty. What was further impressive was his stance on debt (domestic debt in particular). “We need to empower our own people and that is why we have increased the allocation to dismantle local debt”. For many suppliers of government services, this was music to their ears as for many years, admittedly, priority was given to foreign contractors over Zambian ones. The K15 billion must fall was the sound that echoed in my mind as I had seen first-hand what the cash starvation had done to many Zambian owned businesses.
Overall, all three professional bodies gave the Minister a thumbs up on the budget. One could get the sense that understanding the debt burden that faced Zambia and the need to achieve some growth meant that work needed to be done.