The consolidated tax proposal by the Communications Authority of Zambia (CAZ) hangs in the balance following last week's dismissal of Zambia's minister of finance and national planning, Ng'andu Magande.

The CAZ made its proposal for inclusion in the 2009 national budget after engaging in discussions with Zambia's major ICT stakeholders, including mobile service providers. The proposed tax incentives were expected to promote growth in the ICT sector and reduce the cost of doing business in Zambia.

Magande has been instrumental in reducing customs duty on computers and zero-rating customs duty on computer components in order to promote the growth of the country's ICT sector.

Zambian President Lupiah Banda has not given a reason for firing Magande, who had held his ministerial position for over five years.

"I'm happy that the person who served under me has become the minister of finance and hope he will continue with the development programs," Magande said.

However, his replacement, Situmbeko Musokotwane, has not indicated whether he will consider the CAZ's proposal. Some have called it unlikely, as Situmbeko's appointed comes at a time when the country must focus on the next national budget, due early next year.

The tax incentives that the CAZ had proposed include the zero-rating of import and value-added tax duties on fiber-optic materials for ICT infrastructure developers and a reduction in customs duty on SIM (Subscriber Identity Module) and recharge cards.

The IDG News Service is a Network World affiliate.