INDEPENDENT tobacco farmers have requested Government to remove the presumptive tax on tobacco to improve competitiveness of the crop.
The farmers have also asked the Ministry of Agriculture and Livestock to buy the tobacco crop which is not contracted by merchants and processors.
According to resolutions issued after a symposium on production and marketing of tobacco, Government has been called upon to reform the tax policy to provide a conducive business climate in the tobacco sector.
“Tobacco production is subjected to three presumptive taxes by Zambia Revenue Authority when other crops such as maize are not taxed. We appeal to Government to remove the presumptive tax on tobacco in order to improve the competitiveness of the crop as well as the sub-sector in general,” it stated.
It stated that over 90 percent of the crop in Zambia is grown under contract, which makes it difficult for non-contract farmers to find market for their commodity.
“The tobacco industry is driven by world demand and that international processors demand traceability of tobacco trading on international markets. Traceability requirements make it difficult for local processors and merchants to trace tobacco produced [by independent farmers] outside contract farming,” it stated.
Minister of Agriculture and Livestock Given Lubinda has since constituted a committee chaired by his deputy, Greyford Monde, to come up with proposals on how Government should deal with tobacco that is not covered by contracts.
The symposium was attended by players in the tobacco value chain, including farmers under out-grower schemes, independent farmers, merchants, processors, manufacturers, Ministry of Agriculture and Livestock officials, Tobacco Board of Zambia management, Tobacco Association of Zambia representatives, officials from the Ministry of Finance, Zambia Revenue Authority, and Ministry of Commerce, Trade and Industry.