The Zambian government on Friday announced the scrapping of the value added tax (VAT), a consumption tax which was introduced in 1995.

Minister of Finance Margaret Mwanakatwe said in her 2019 budget address that the government has decided to scrap the tax and replace it with a simpler non-refundable sales tax after reviewing the various taxes and the need to enhance domestic mobilization.

The government, she said, will finalize audits of all outstanding VAT refund claims and enforce all outstanding VAT assessments in order to collect any unpaid taxes.

She further said the government remains committed to settling the verified VAT refund claims that have so far been accumulated.

Meanwhile, the government has also proposed to increase excise duty on plastic carrier bags to 30 percent from 20 percent in order to discourage the use of plastic carrier bags and curtail their negative impact on the environment.