Africa-Press – Zambia. The Zambia Association of Manufacturers (ZAM) has called for the immediate temporal suspension of certain taxes by the government to mitigate the effects that will come with the increase in fuel pump prices.
ZAM president, Ashu Sagar said government should also alternatively think of reintroducing VAT as part of the fuel cost structure where manufacturers will be able to claim it without pushing the pump price up.
He said including VAT in the pricing mechanisms will enable manufacturers and business houses to claim it back and ultimately this will lower distribution costs.
“The Pump price will remain what it is but will enable us as manufacturers to claim it back on the import cost of fuel,” he said.
Mr. Sagar said what is pushing commodity prices up are not just production costs but also distribution which he added is triggered by every rise in fuel prices.
Mr. Sagar said consumers must understand that it’s not the desire of manufacturers to see them spending a lot of money on products but that having different commodities on the shelves comes at a cost which, in this case will go up because of the fuel pump price increase.
“We are living in very difficult times, we have external factors that are obviously impacting the cost of oil on the international market, and this has to do with what is happening in Russia,” he said.
Mr. Sagar said the 16 percent VAT that was claimable is no longer part of the cost structure but that having it back will be a sigh of relief to the consumer, unlike now where the cost is heaped on them.
Mr. Sagar added the war in Russia coupled with the weak performance of the Kwacha against the dollar, the increment is justifiable but that government should also ensure stabilizing the exchange rate.
The ZAM president said the mining has for the past three years been absent from the foreign exchange trade floor and has been paying all its taxes in dollars direct to the treasury.
He said there is a need to find a mechanism that will allow the mining industry to be a participant in the free market of foreign exchange in Zambia to allow a stable supply of foreign exchange.
Mr Sagar said there are gaps in the supply of the United States dollars where players need to wait for the allocation of foreign exchange for days. The Energy Regulations Board-ERB adjusted upwards fuel pump prices by K4.54 to K4.68 and K3.93 per litre for petrol, diesel and kerosene respectively.
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