10/10/2025
ZAM FEARS TAX UNCERTAINTY RISKS ILLICIT TRADE, INDUSTRIAL SLOWDOWN
The Zambia Association of Manufacturers (ZAM) President, Ashu Sagar, says adjustments to excise taxes on alcohol, to***co, and FMCGs introduced in 2025 created uncertainty.
Sagar said sudden and unpredictable changes discourage reinvestment and may fuel illicit trade, posing a severe threat to both public health and national revenue in 2026.
He said the current excise duty regime itself is a primary driver of this problem — notably, the ad valorem system for spirits and the inflation-linked hikes for to***co create market distortion and uncertainty.
The ZAM President, therefore, recommends predictable, phased, and industry-aligned reforms that will support both revenue mobilisation and continued investment.
He said the introduction of the Minimum Alternative Tax (MAT) in 2025, based on turnover rather than profit, poses challenges for capital-intensive industries with narrow margins.
Sagar encouraged consideration of exemptions or a tailored application to support industrial growth.
He said the 2026 National Budget reflects Government’s recognition of manufacturing as a driver of inclusive and sustainable development.
Sagar said with consistent implementation and continued public–private dialogue, these measures can enhance Zambia’s competitiveness, deepen value addition, and create more jobs for Zambians.
He reaffirmed ZAM's commitment to working with Government, Parliament, and stakeholders to ensure that these policies are translated into concrete outcomes, while jointly addressing persistent challenges such as electricity supply, high production costs, and access to affordable finance.
ZAM is a private sector-led, membership-driven organisation, established in 1985 and registered under Cap 119 of the Societies Act of Zambia.
It represents the interests of manufacturers in Zambia, with a membership of over 200 firms involved in more than 20 sub-manufacturing categories.
This is contained in a statement issued by Zambia Association of Manufacturers (ZAM) Chief Executive Officer Muntanga Lindunda.