A broad section of experts have charged that new taxes proposed in the 2027 national budget will hurt consumer spending and slow down Zambia’s industrial drive. In his 2027 budget address, Finance Minister Situmbeko Musokotwane announced a raft of new taxes, including an increase…

A broad section of experts have charged that new taxes proposed in the 2027 national budget will hurt consumer spending and slow down Zambia’s industrial drive.

In his 2027 budget address, Finance Minister Situmbeko Musokotwane announced a raft of new taxes, including an increase in excise duty on single-use plastics to 200 percent from 100 percent. He also proposed to introduce a specific excise duty on plastic bottles at 80 ngwee per bottle. There is also a new excise duty on sugar of K1 per kilogram and a further 20 percent excise duty on chocolate and sugar confectionery. The 2027 national budget has also proposed an increase in mobile money levies.

In separate interviews, the experts noted that manufacturers and traders will not absorb the added production costs but will transfer the tax burden to consumers.

Financial analyst Yusuf Dodia said the new taxes will make it difficult for some consumers to afford a range of everyday products.

“Sugar is an essential ingredient in a lot of products. Plastics are used in packaging and storage in the entire production value chain. A new tax of 80 ngwee per bottle raises the cost of locally produced items,” Mr Dodia said.

Mr Dodia added that Zambia risks becoming regionally uncompetitive as an industrial hub because of higher taxes.

“It is very simple. When you over-tax the producers, they simply transfer the cost to the consumer, which affects overall sales and thereby risks jobs.”

And Zambia Consumer Association Executive Director Juba Sakala says the new tax framework is not consumer friendly.

“This government now appears determined to tax us out of everything we have. The new tax on sugar is difficult to understand. The cost of producing and packaging anything plastic in Zambia will go up now, and even mobile money transfer has become expensive,” Mr Sakala said.

Mr Sakala noted that 2027 will be the year in which Zambians will have to tighten their belts.

Meanwhile, Zambian Breweries Plc has appealed to the government to continue working on a predictable tax environment.

Zambian Breweries Plc Director of Corporate and Regulatory Affairs Chipego Zulu said tax stability and regulatory predictability are essential to creating a conducive environment for business growth.

“We are encouraged by the theme that speaks to growing Zambia by moving from stabilisation to unlocking opportunities. As a major player in manufacturing and Zambia’s largest brewer, we fully back the government’s shift towards aggressive local industrialisation and value addition.

“However, we would like to emphasise that tax reliability and predictability are absolutely core to driving this growth agenda. For a business like ours, a predictable fiscal environment is not a luxury. It is an absolute necessity for business continuity and for business growth,” Ms Zulu said.

She added: “Fiscal predictability allows us to make long-term capital investments in local agricultural value chains such as cassava, sorghum and barley.

“Looking ahead, we are excited to provide further private sector input into the Medium-Term Revenue Strategy, with the goal of collaborating with the Ministry of Finance to firmly entrench tax stability and predictability over the next few years, ensuring sustainable job creation and economic growth from the ground up together.”