ByMAIMBOLWA MULIKELELA –
Government has singed a Statutory Instrument (SI) Number 103 of 2013, which brings into effect the Customs and Excise Duty for Public Benefit Organisations.
The SI which also brings into consideration Amendments and Regulations, was effective from November 8, 2013.
The SI which was signed by Finance Minister Alexander Chikwanda in Lusaka yesterday, means that there will be no more tax free motor vehicles for Public benefit Organisations such as non profit making entities.
“In view of this, the ministry would like to notify the Public Benefit Organisations that with effect from November 8, 2013, all motor vehicles and spare parts for motor vehicles shall no longer qualify for tax exemption,” Mr Chikwanda said..
Among other goods which will no longer qualify for tax exemption under the Public Benefit Organisation Scheme, are wines and some other forms types of liquor or alcoholic beverages, electrical household goods and tobacco
Others are goods whose value is equivalent to a travellers allowance remission under Statutory Instrument Number 54 of 2000, Customs and Excise [General] Regulations, of 2000 and Firearms.
In a statement issued in Lusaka by Finance Public Relations Officer Chileshe Kandeta, goods on which Public Benefit Organisations will still enjoy exemptions are sacramental wine when imported by a religious order or Church, beds, mattresses and linen including kitchen equipment.
Commenting on the measure, Secretary to the Treasury Fredson Yamba said the Ministry of Finance was deeply concerned that some Public Benefit Organisations had entrenched the practice of changing the terms of importation, purpose of usage and in some cases, selling tax exempted imported goods without the approval of the Commissioner General of the Zambia Revenue Authority (ZRA).
“Under Statutory Instrument No. 103 of 2013, any organisation which violates the provisions under which existing tax exemption incentives have been granted, shall face sanctions, including revocation of the approval.
And such an organisation will also be liable to pay requisite taxes on the goods imported under the scheme at the rate leviable at the time of the initial importation of such goods,” Mr Yamba said.
During presentation of the 2014 National Budget to Parliament on October11, 2013, Mr Chikwanda announced that Government had undertaken a review of tax incentive regimes in order to rationalise them, as part of the tax reform process.
To this effect, the Customs and Excise (Public Benefit Organisations) (Rebate, Refund or Remission) Regulations, Statutory Instrument No.7 of 2009 was reviewed, to streamline exemptions provided to Public Benefit Organisations.
In addition, the Ministry also reviewed the administrative processes in order to provide efficient and timely delivery of services.