(3 minutes read)
- The Zambian Government has rolled over the policy of waiving tax on imported fuel. This would lead to foregoing millions in tax revenues into the 2022 budget cycle
- This waiver was initially implemented last year during the election year to rein in inflation
- Government had last year 2021 resorted to waiving both excise and customs duty in what was largely seen as an attempt to avoid a fuel price hike.
The Zambian Government has rolled over the policy of waiving tax on imported fuel. This would lead to foregoing millions in tax revenues into the 2022 budget cycle. This waiver was initially implemented last year during the election year to rein in inflation.
Government had last year 2021 resorted to waiving both excise and customs duty in what was largely seen as an attempt to avoid a fuel price hike. This helped in averting price hike during an election year, though the government had to put up with a lot of revenue loss. The suspension of customs and excise duty on the importation of petroleum products were extended to petrol, diesel, kerosene and liquefied petroleum gas effective 16 January 2022 for another six months.
Finance Minister Dr. Situmbeko Musokotwane said that the effective customs duty rate for petrol, diesel, kerosene and liquefied petroleum gas has been zero rates. The total quantities of the petroleum products suspended include 734,860 m3 for diesel, 329, 420 m3 for petrol, 5,000 m3 for kerosene and 5, 000kg for liquefied petroleum gas.
Fuel prices in Zambia were recently increased leading to further increases in bus and taxi fares resulting in a price spiral across the country, leading to public resentment.
The current Government leaders are contemplating procurement of oil from neighboring Angola through a pipeline to avoid middlemen and to minimize the huge logistical/shipping cost. The country is also thinking towards developing bio-fuel as a key fuel blend which would cut down huge fossil fuel imports.
