The Civil Society for Poverty Reduction (CSPR) says increasing the Value Added Tax (VAT) rate may not have been the best option in a country where over 60 percent of the population lives in poverty and 48 percent in extreme poverty.
Speaking during the 2027 National Budget Media and Stakeholders’ Engagement Meeting held in Lusaka, CSPR Executive Director Isabel Mukelabai urged the government to develop a clear framework for broadening the tax base rather than burdening those already paying taxes.
She says CSPR’s analysis shows that some of the proposed tax measures, including the increase in VAT from 16 to 16.5 percent, mobile money levies and higher duties on selected goods, have the potential to increase the cost of living for ordinary households and are regressive in nature.
Ms Mukelabai says this may undermine efforts under the Grow Zambia Agenda, which aims to reduce the cost of living among Zambians over the next five years through consistent policy and programme delivery, with clear and measurable targets.
She has further raised concerns about limited disclosure of tax expenditures and outstanding VAT refund claims, which stood at K60.3 billion as of September 2026, calling for transparency on tax exemptions and incentives, as well as the clearing of outstanding arrears.
She says CSPR believes Zambia can strengthen domestic revenue by improving tax compliance, reducing illicit financial flows, strengthening mining tax administration and addressing revenue leakages, rather than relying excessively on tax increases that may place additional pressure on vulnerable households.
By Best Jere
