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PMRC urges revision of taxes in Petroleum Procurement System

BUUMBA CHIMBULU writes

@SunZambian

TAXES that govern the petroleum procurement system should be revisited to eliminate any expensive acquirement procedures of the commodity, Policy Monitoring and Research Centre (PMRC) has suggested.

Eliminating any expensive procurement procedures will allow greater competition in the market, says PMRC Executive Director, Bernadette Deka-Zulu.

Ms Deka-Zulu said this however required that Government revisited and reformed the controls and taxes that governed the petroleum procurement system.

She also said in a statement that the long-term solution for the petroleum sector in Zambia was to liberalise it.

“Oil Marketing Companies of the private sector need to be responsible for the procurement of the country’s petroleum needs.

“This may reduce the financial burden on the treasury and possibly free up resources to other sectors,” Ms Deka-Zulu said.

Furthermore, Ms Deka-Zulu urged Government to stiffen measures to ensure that there was uninterrupted of petroleum products into Zambia to guarantee supply and ensure stable and predictable prices.

Meanwhile, Ms Deka-Zulu stressed the need for Government to consider other measures that would stabilise the Zambia Revenue Authority (ZRA) revenue collection and not further tighten the fiscal space.

She observed that the move by Government to introduce Value Added Tax zero rating on fuel importation would reduce the ZRA tax revenue base.

“The idea behind the amendment was to lower the price of petrol and diesel for ease accessibility by the people.

“In this case, consumers are able to purchase fuel at a cheaper rate that will eventually increase the demand for fuel enabling suppliers to continuously stock fuel in their depots,” Ms Deka-Zulu said.

She further emphasised that the refinery and the pipeline needed to be addressed.

These assets, she said, were all over 3o years old and required some investment to make them more efficient.

“At present, the refinery’s production can only meet 50 percent of national demand,” Ms Deka-Zulu said.

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