ZAM has made numerous calls and submissions on behalf of its members to the Ministry of Finance regarding the suspension of a 5 % surtax on products (inputs and raw materials) that are not being produced locally but are still attracting the 5% charge introduced in 2016. With the growing list on our submission now comprising over 50 critical inputs into the Manufacturing process across a number of sub-sectors, it has become a significant hinderance to enhancing the competitiveness of local products. This has direct implications on the cost of the final products being sold to consumers and may discourage the purchase and consumption of Proudly Zambian brands based on pricing structures.
It is regrettable to note that despite the surtax being introduced to promote the growth of Industry, a number of manufacturers have continued to incur additional and wrongly applied charges on raw materials and intermediate inputs into their processes. As such, the surtax is stifling production and adding to the high cost of doing business. This is not to say that when correctly applied the surtax does not support industrial growth, to the contrary where correctly applied we are lobbying for a higher surtax of 15% because the current level at 5% is still too low to cause significant growth of the local industry by promoting the development and strengthening of inter-sectoral linkages. Further to this, the higher surtax can actually be justified as a measure to level the playing field for Zambian manufacturers by addressing transportation costs incurred in transporting inputs inland for further processing.
To this end, ZAM will continue actively engaging the Ministry of Finance for the immediate suspension of the surtax erroneously applied on; steel products and signage materials, and agro-processing inputs in the leather and processed foods sub-sector, as well as key agricultural inputs such as wheat, when it is off-season in Zambia. It is the earnest position of Industry that the surtax should not be used or even viewed as a revenue generating measure, especially not at the expense of Industry which must be robust and growing in order to stimulate growth in the Zambian economy. Indeed, Industry cannot afford to incur such huge costs if expected to remain profitable, competitive and positively contributing to Zambia’s sustainable economic development goals.
It is against this background that we urge the Government through the Ministry of Finance to address this matter with the efficiency and urgency and in so doing support the growth of Industry. Manufacturers incurring increased challenges with the erroneous implementation of the Surtax are encouraged to make their submissions to the Association for further engagement and lobbying.
ANNEX 1: LIST OF PRODUCTS FOR REMOVAL FROM SURTAX LIST
Table 1: List of Products for Removal from the SGS List
| # | Product | HS Code | Used in Manufacture of |
| 1 | Rod Cement (Hot Melt) | 3916.90.90 | Leather Industry Products |
| 2 | Relugan Re | 3209.90.90 | Leather Industry Products |
| 3 | Pu Lining | 3921.90.20 | Leather Industry Products |
| 4 | Neutrigan Mos | 2519.90.00 | Leather Industry Products |
| 5 | Powdered Fat | 1571.90 | Agro-processing Products |
| 6 | Vegetable Fat | 1516.20 | Agro-processing Products |
| 7 | Wheat | 1001 | Agro-Processing Input |
| 8 | White-coated Chromadek Flat Sheet 0.8mm | 7210.70.00 | Signage and printing products |
| 9 | Traffic Grey-coated Road Sign Chromadek 1.4mm | 7210.70.00 | Signage and printing products |
| 10 | ABS Board – various thicknesses | 3916.90.90 | Signage and printing products |
| 11 | Corroboard – various thicknesses | 3916.90.90 | Signage and printing products |
| 12 | Brass Sheet 2mm | 7409.21.00 | Signage and printing products |
| 13 | Rowmark Sheets | 3916.90.90 | Signage and printing products |
| 14 | Perspex – 3mm & 5mm | 39205160 | Signage and printing products |
| 15 | Aluminium Snapper Frames | Signage and printing products | |
| 16 | Key Tags | Signage and printing products | |
| 17 | FLAT/HOT-ROLLED IRON/STEEL, IN COILS, WIDTH >=600MM, WITH PATTERNS IN RELIEF | 72081000 | Steel Industry |
| 18 | FLAT/HOT-ROLLED IRON/STEEL,IN COILS, WIDTH >=600MM, PICKLED, >=4.75MM THICK | 72082500 | Steel Industry |
| 19 | FLAT/HOTROLLED IRON/STEEL, IN COILS, WID>=600MM, PICKLED, >=3MM BUT <4.7MM THICK | 72082600 | Steel Industry |
| 20 | Flat/hot-rolled iron/steel, in coils, width >=600mm, pickled, <3mm thick | 72082700 | Steel Industry |
| 21 | FLAT/HOT-ROLLED IRON/STEEL, IN COILS, WIDTH >=600MM, NOT PICKLED, >10MM THICK | 72083600 | Steel Industry |
| 22 | FLAT/HOTROLLED IRON/STEEL, IN COILS, WID >=600MM, NOT PCKLD, >=4.75MM, BUT <=10MM | 72083700 | Steel Industry |
| 23 | FLAT/HOTROLLED IRON/STEEL, COILS, WID, >=600MM, NOT PICKLD >=3MM, BUT <4.75MM THICK | 72083800 | Steel Industry |
| 24 | Flat/hot rolled iron/steel, in coils, width >=600mm, not pickled, 3mm thick | 72083900 | Steel Industry |
| 25 | FLAT/HOTROLLED IRON/STEEL, NOT COILS, WIDTH>=600MM, WITH PATTERNS IN RELIEF | 72084000 | Steel Industry |
| 26 | Flat/hot rolled iron/steel, not in coils, width>=600mm, >10mm thick | 72085100 | Steel Industry |
| 27 | FLAT/HOTROLLED IRON/STEEL, NOT IN COILS, WID >=600MM, >=4.75MM BUT <=10MM THICK | 72085200 | Steel Industry |
| 28 | FLAT/HOTROLLED IRON/STEEL, NOT COILS, WIDTH >=600MM, >=3MM BUT <4.75MM THICK | 72085300 | Steel Industry |
| 29 | Flat/hot-rolled iron/steel, not in coils, width >=600mm, <3mm thick | 72085400 | Steel Industry |
| 30 | FLAT/HOTROLLED IRON/STEEL, WIDTH >=600MM NES INC.FURTHER WORKED THAN HOTROLLED | 72089000 | Steel Industry |
| 31 | Flat/cold-rolled iron/steel, in coils, width >=600mm, >=3mm thick | 72091500 | Steel Industry |
| 32 | Flat/cold-rolled iron/steel, in coils, width >=600mm, >1mm but <3mm | 72091600 | Steel Industry |
| 33 | FLAT/COLDROLLED IRON/STEEL, IN COILS, WIDTH >=600MM, >=0.5MM BUT <=1MM THICK | 72091700 | Steel Industry |
| 34 | Flat/cold-rolled iron/steel, in coils, width >=600mm, <0.5mm thick | 72091800 | Steel Industry |
| 35 | Flat/cold-rolled iron/steel, not in coils, width >=600mm, >=3mm thick | 72092500 | Steel Industry |
| 36 | FLAT/COLD-ROLLED IRON/STEEL, NOT IN COILS, WIDTH >=600MM, >1MM BUT <3MM THICK | 72092600 | Steel Industry |
| 37 | FLAT/COLD-ROLLED IRON/STEEL, NOT IN COILS, WID>=600MM, >=0.5MM BUT <=1MM THICK | 72092700 | Steel Industry |
| 38 | Flat/cold-rolled iron/steel, not in coils, width >=600mm, 0.5mm thick | 72092800 | Steel Industry |
| 39 | FLAT/COLDROLLED IRON/NON-ALLOY STEEL, WID>=600MM, NOT CLAD, PLATED/COATED NES | 72099000 | Steel Industry |
| 40 | HOTROLLED IRON/STEEL BARS 7 RODS, IN COILS, CONT.DEFORMATIONS PROD.BY ROLLING | 72131000 | Steel Industry |
| 41 | U, I or H sections of iron/steel, hot rolled…, <80mm high | 72161000 | Steel Industry |
| 42 | U sections of iron/steel, hot rolled…, >=80mm high | 72163100 | Steel Industry |
| 43 | I sections of iron/steel, hot-rolled.., >=80mm high | 72163200 | Steel Industry |
| 44 | H sections of iron/steel, hot-rolled .., >=80mm high | 72163300 | Steel Industry |
| 45 | Screw hooks and screw rings of iron and steel | 73181300 | Steel Industry |
| 46 | Self-tapping screws of iron or steel | 73181400 | Steel Industry |
| 47 | Screws and bolts of iron or steel, nes | 73181500 | Steel Industry |
| 48 | Nuts of iron or steel | 73181600 | Steel Industry |
| 48 | Threaded articles, nes, of iron or steel | 73181900 | Steel Industry |
| 50 | Spring washers and other lock washers | 73182100 | Steel Industry |
| 51 | Washers, nes | 73182200 | Steel Industry |
Source: Input from ZAM Members
