THE Ministry of Finance and the Zambia Revenue Authority (ZRA) have backed the Lands Amendment Bill No. 24 of 2015, saying it will remove loopholes for avoidance of paying consideration or lease holding fees.
On Monday, the Zambia Land Alliance opposed the Bill by proposing that Government should withdraw it and instead focus on concluding the process of putting in place a comprehensive land policy.
But appearing before a Parliamentary Committee on Economic Affairs, Energy and Labour, Ministry of Finance permanent secretary in charge of Budget and Economic Division, Pamela Kabamba, opposed the idea by some stakeholders to have the Bill withdrawn.
Ms Kabamba said the Ministry of Finance and ZRA were against the withdrawal of the Bill because it was important as it would help finance the national Budget.
“Clause 5 section 16 of this Bill is meant to increase the proportion of revenues arising from consideration fees to form part of the general revenue by reducing the per cent earmarked for Land Development Fund from 75 per cent to 25 per cent,” she said.
Ms Kabamba said the objective of the Bill was to amend the Lands Act so as to revise the circumstances under which consideration was payable in respect of the alienation of land and revise the percentage of consideration to be paid into the Land Development Fund.
Ms Kabamba, who led an eight-member delegation from her ministry and ZRA, observed that the Bill would make foreigners pay more tax for wanting to occupy land in Zambia.
“Mr Chairman, there will be high charges to foreigners who want to occupy land in Zambia,” she said.
Ms Kabamba also explained Clause 2 was intended to remove a redundant provision relating to the circumstances where the President may alienate land to non-Zambians who had an interest or right in land arising from a lease or sub-lease for a period of less than five years.
And Ms Kabamba endorsed the introduction of the Insurance Premium Levy Bill No. 25 of 2015 which provides for the reduction of the rate to 3 percent from 16 percent.
She said the levy was meant to ease compliance on the accounting of tax on insurance, adding that it was also meant to reduce the cost of insurance and encourage individuals and businesses to build the culture of covering risks.
“Currently under the Value Added Tax, a 16 per cent charge was applicable on property or non-life insurance policies while life insurance and re-insurance policies were exempted from tax,” she said.
Ms Kabamba said the taxation of insurance using VAT had been a challenge for the sub-sector and resulted in various administrative arrangements to try to ease the accounting for the tax by the players.
“In addition, the differentiated application of the VAT on insurances policies resulted in challenges of compliance and administration on hybrid insurance policies which have both life and non-life components,” Ms Kabamba said.
She said removal of VAT and replacement with a levy was meant to simplify the taxation of insurance products, remove discrimination and spur further investment in the sector.