Zambia scraps plan to replace VAT with sales tax

Zambia will not replace its value-added tax (VAT) with a non-refundable sales tax, Finance Minister Bwalya Ng'andu said on Friday, after the proposal met substantial opposition from businesses. "Government has decided to maintain the Value Added Tax, but address the compliance and administrative challenges," Ng'andu said in a budget speech.

Zambia's mining industry fiercely opposes the tax - just one sore point between the government and the economy's most important sector. Since being appointed in July, Ng'andu has sought to mend fences with miners, with relations deteriorating following tax changes and an ownership dispute over Vedanta Resources' Konkola Copper Mines.

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