Maravi

Revise tax exemptions on PAYE, advises Mukuka

http://www.postzambia.com/post-read_article.php?articleId=22863

Revise tax exemptions on PAYE, advises Mukuka
By Kabanda Chulu
Tuesday February 20, 2007 [02:00]

ZAMBIA Union of Financial and Allied Workers (ZUFIAW) president Cephas Mukuka has advised the government to revise the tax exemptions on pay as you earn (PAYE) as it would only benefit a few people. And the Zambia Chamber of Commerce and Industry (ZACCI) has expressed concern at the excessive expenditure allocations in non-productive areas proposed by finance minister Ng'andu Magande in the 2007 national budget. Mukuka observed that the zero rating of tax on incomes amounting to K500, 000 would only apply to three per cent of the people working in formal sector employment.

"These exemptions will only benefit few people since the majority gets wages above K500, 000 and with the current negotiations being undertaken by various unions, wages will definitely be above the required figure for exemption and people will still fall in the taxable categories," Mukuka said. "As much as we welcome the reduction in PAYE in all the three bands, the government should broaden the tax base and consequently revise the tax exemptions since it will just benefit few people."

He also expressed disappointment at the reduction in allocations meant for domestic debt from last year's K700 billion to K658 billion when the current debt stands at over K6 trillion. "Since the country will spend very little to service the foreign debt, we expected the government to start dismantling the local debts because the people owed money are Zambians and these funds when released will be spent locally and will also create employment," said Mukuka. "Actually the reduction is wrong and the government should reconsider it because it will further shrink the small medium enterprises, which is competing unfairly with those investors who are given incentives."

And ZACCI chairman for the fiscal and monetary committee Ben Zulu said the government should focus on spending on capital projects rather than non-capital expenditure. "We are concerned with the proposed allocation of excessive expenditure in non-productive areas of the economy, for instance, we do not understand how Magande allocated huge amounts for the renovations at the Ministry of Finance headquarters at the expense of other productive sectors," Zulu said. "And the government should also clarify the disparities in expenditure for the renovations on Kasama and Solwezi airports because we believe Nort-Western Zambia is posed for economic growth owing to the boom in the mining activities in the area and one will assume that a higher figure of expenditure should have been allocated for Solwezi Airport."

Last week, Magande announced the 2007 national budget amounting to K12.4 trillion and about K9.8 trillion would be spent on non-capital expenditure, which is more than 82 per cent.

Labels: MAGANDE, TAXATION

posted by MrK @ 1:43 PM