No more tax free motor vehicles for public benefit organisations

tax avoidance

MINISTER of Finance Alexander Chikwanda has lifted the tax exemption for public benefit organisations on customs and exercise duty on motor vehicles and motor vehicle spare parts.
Mr Chikwanda said that the lifting of tax exemption is with effect from November 8, this year.
Some of the goods that will no longer enjoy tax exemption are wines and some other liquor or alcoholic beverages.
Mr Chikwanda said in a statement that other products that will be affected by the lifting of tax exemption are goods whose value is equivalent to travellers allowance remission under Statutory Instrument (SI) 103, firearms, household electrical goods and tobaccos.
The statement was released by Ministry of Finance, public relations officer Chileshe Kandenta.
“Finance Minister Alexander Chikwanda has signed Statutory Instrument No. 103 of 2013, bringing into effect the Customs and Excise (Public Benefit Organisation) Amendment Regulations, with effect from 8th November, 2013,” the statement reads.
Mr Chikwanda has said, however, that goods on which public benefit organisations will still enjoy exemptions include; sacramental wine when imported by a religious order or church, beds, mattresses and linen; and kitchen equipment.
And commenting on the measure, Secretary to the Treasury Fredson Yamba said that 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-exempt imported goods without the approval of the Commissioner General of the Zambia Revenue Authority.
“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 will 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,” said Mr. Yamba.
During the presentation of the 2014 national budget to Parliament on October 11, this year, Mr Chikwanda announced that Government had undertaken a review of tax incentive regimes in order to rationalise tax incentives, 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 reviewed the administrative processes in order to provide efficient and timely delivery of services.