FINANCE minister Bwalya Ng’andu has announced measures to resuscitate Zambia’s tourism sector.
Following the COVID-19 outbreak in March this year, the country’s tourism has been thrown into confusion, due to non-travel of tourists – both local and international ones.
On Friday, Dr Ng’andu presented the 2021 national budget and in his speech committed to promoting local tourism.
Dr Ng’andu proposed to reduce corporate income tax rate to 15 per cent from 35 per cent on income earned by hotels and lodges on accommodation and food services, among other measures.
He also said he would suspend import duty on safari game viewing motor vehicles and tourist buses and coaches.
The other measures include suspending license of renewal fees paid by hotels and lodges, suspending the retention fees paid by tourism enterprises and suspending registration fees for hotel managers.
“I propose further tax incentives as follows: a) introduce a local content allowance for income tax purposes for utilisation of selected local raw materials to encourage local content and value addition and b) reduce the investment threshold for a Zambian citizen to qualify for tax incentives under the Zambia Development Agency Act No.11 of 2006 to US$100,000 from US$500,000 for those intending to operate in a priority sector, a multi-facility economic zone or industrial park,” Dr Ng’andu explained.
He said the announced measures were in addition to the existing incentives and those granted in response to COVID-19 earlier this year.
“The measures that I have outlined will take effect on 1st January, 2021,” Dr Ng’andu said.
Meanwhile, to stimulate economic activity in other sectors, the minister, inter alia, proposed the removal of import duty on copper ores and concentrates to encourage local processing.
He also suggested the suspension of import duty on importation of refrigerated trucks to support the domestic and export markets and reduction of import duty to five per cent from 25 per cent on selected trimmings, to promote the local garments and textile industry.
Dr Ng’andu also lowered import duty to 15 per cent from 30 per cent on electric motor vehicles, to reduce the use of fossil fuel.