CUTS Lusaka Warns

The New Taxes Threaten SMEs, Consumers

By Francis Maingaila

Lusaka. Zambia24 - (July 3, 2025) - The Consumer Unity and Trust Society (CUTS) International Lusaka has warned that proposed tax increases in the K33.6 billion Supplementary Budget could hurt consumers and small businesses already facing economic pressures.

CUTS Communication Officer Nancy Mwape told the media that while the organisation supports the government’s aim to increase domestic revenue and reduce debt, some of the new tax proposals could have unintended negative consequences.

The proposed measures include raising excise duty on spirits and wines from 60 to 80 percent, reintroducing a 50 percent duty on clear alcohol, and doubling the duty on sugary drinks. 

Mwape said these changes, if implemented without safeguards, could lead to higher production costs, price hikes for consumers, job losses, and possible closure of local businesses.

“Small and medium-sized enterprises are already struggling with high energy costs, limited access to affordable credit, and a weakening currency,” she said. 

“These taxes risk worsening the situation and undermining efforts to create jobs and support industrial growth.”

CUTS is calling on the government to adopt a phased approach to implementing the taxes and provide targeted relief to SMEs. 

The organisation also recommends offering incentives to companies using traditional crops like millet and sorghum in food and beverage production, and investing in nutrition education and agro-processing to promote healthier diets.

Mwape noted that while taxing alcohol and sugary products may support public health goals, the strategy must be inclusive and based on evidence, ensuring that low-income consumers are not unfairly burdened.

She urged the Ministry of Finance and Parliament’s Planning and Budgeting Committee to ensure transparency and public accountability in how additional tax revenue is used, particularly in critical sectors like health, education, and agriculture.

Mwape reaffirmed CUTS' commitment to working with government and stakeholders to ensure that fiscal reforms are balanced, pro-growth, and consumer-sensitive.