By JUDITH NAMUTOWE –

THE Economics Association of Zambia (EAZ) has urged the Government to scrap off or reduce tax on Jet fuel in Zambia.

The government should announce concrete plans to restructure or even close the Indeni Refinery, re-engineer the TAZAMA Pipeline to permit importation of refined products, and allow competition in the import of petroleum products.

EAZ president Isaac Ngoma said such measures would help to bring down the cost of fuel, which in turn could make the country an affordable airlines destination, thereby, supporting the growth of the tourism and other sectors.

“We urge the government to seriously address these concerns to safeguard and promote the diversification of the economy,” he said.

Reacting to KLM Royal Dutch Airlines’ decision to withdraw its flights to Lusaka, Mr Ngoma said EAZ was alarmed as it now meant that Zambia had no direct airline service to Europe, with the withdrawal by British Airways last year.

“As the Tourism Council of Zambia (TCZ) has stated, this will have serious consequences on the tourist industry, one of our main hopes for diversification.

“However, the potential consequences go further than that, since some of Zambia’s Foreign Direct Investment and commercial relations depend on convenient links to Europe and North America,” he said.

Mr Ngoma said it was sad the move had come at a time when major investments were taking place at the local airports, especially Kenneth Kaunda International Airport (KKIA), the viability of which would be adversely affected by lower traffic volumes and fewer airlines.

He said EAZ has on several occasions warned the Government that the high taxes on jet fuel, the high cost of fuel resulting from the Indeni Refinery and the fuel import monopoly have already had an adverse effect on the country’s trade and cost of services, but that not much had been done to address the situation.

In light of the proposed set up of a national airline, Mr Ngoma said that there would be pronounced calls to accelerate its operationalisation to fill the gap left by KLM.

“But a national airline will face the same high costs unless government takes urgent and long-overdue action,” he said.