Zambia raises fuel duty by large extent

The Zambian government has increased excise duty on fuel from 15 percent to 45 percent while the Energy Regulation Board (ERB) has effected a strategic reserve fee (SRF) on fuel accounting for 300 kwacha per liter, according to Zambia Daily Mail.

Calculations and consultations done by Zambia Association Chambers of Commerce and Industry (ZACCI) have ascertained that duties account for almost 50 percent of fuel pump price.

The newspaper Friday quoted ZACCI Chief Executive Officer Justine Chisulo as saying in a statement that the SRF now being implemented is costing taxpayers over 100 billion kwacha (about 23. 81 million U.S. dollars) a year.

He said in addition to duties being charged on fuel, value added tax is also pegged on the resultant figure and everyone who buys fuel is paying.

"This is a clear cases of tax being charged on tax. There is not a justifiable reason for this to happen other than the wish by government to collect taxes, which in turn makes Zambian businesses become uncompetitive in the region," he said.

After comparing the pricing of fuel in the region, ZACCI said South Africa and Zimbabwe charge less than 1 dollar per liter but Zambia is charging about 1.5 dollars a liter.

ZACCI has since proposed that the government enters into negotiations with oil marketing companies to agree on the pricing mechanism of fuel.

ZACCI said businesses need to be assisted to reduce the cost of doing business as well as be certain of the costs of doing businesses.

Source: Xinhua