Maravi

Stakeholders ask govt to adjust tax structures

Stakeholders ask govt to adjust tax structures
By Noel Sichalwe
Saturday November 17, 2007 [03:00]

SEVERAL stakeholders have proposed minimal adjustments to the current tax structures, particularly the Value Added Tax (VAT) and Pay As You Earn (PAYE) in the 2008 budget. According to a compilation of tax and non-tax proposals from 42 stakeholders for the 2008 budget, the stakeholders have proposed reduction of the current 17.5 per cent VAT to percentage figures ranging from 10 to 15 per cent.

They have also proposed changes in the PAYE threshold to give relief to many Zambians earning less than K900,000.

But finance deputy minister Jonas Shakafuswa yesterday said that the tax proposals were acceptable as long as the stakeholders could provide alternative sources of government revenue that would be lost through the tax reductions.
Shakafuswa said the government was ready to consider suggestions from stakeholders to adjust the current tax structures as long as they could propose alternative sources of income.

“If the stakeholders can find money to replace the revenue loss from the proposed tax reductions, we will take it up,” he said. “This is the logical thing to do for them. So what I am saying is that these changes are acceptable as long they can provide us with alternatives. I am just surprised that these proposals are coming when we are going into serious budgeting.”
Among the 42 stakeholders that submitted to the Ministry of Finance were 11 associations, 16 companies, eight government ministries, one church organisation and six individuals.

The Zambia Institute of Chattered Accountant (ZICA) has proposed that people earning up to K9,600,000 per annum should not attract any tax and those earning K48 million per annum should attract 25 per cent tax while others earning above K66 million per annum should attract 30 per cent tax.

It has also proposed an increase in the tax credit for persons with disabilities from K72,000 to K600,000 per annum.

ZICA has, however, suggested that corporate tax rates for companies should remain at the same level and that government should negotiate development agreements to level the playing field.

They have further suggested a VAT reduction from 17.5 per cent to 15 percent.
The Zambia Association of Chambers of Commerce and Industry (ZACCI) has also proposed that any monthly wage of K900,000 should not be subjected to tax under PAYE.

They have also proposed tax relief for pension contributions so that more people can take voluntary pension schemes. They have further stated that negotiations of development agreements should be concluded by the end of the year in time for 2008 budget.

ZACCI has further proposed a VAT reduction from 17.5 per cent to 15 per cent.
The Zambia Association of Manufacturers (ZAM) has noted that government should allow VAT claimed on petrol expenses to be increased from 20 per cent to 50 per cent and abolish VAT minimum taxable values on selected items.
Northmead Assembly of God Church has suggested a decrease in PAYE by five per cent for all income bands. They have stated that PAYE for medical personnel, teachers, lecturers, police and armed forces should be 12 percentage points lower than that of other working class.
They have also called for the reduction of VAT from 17.5 per cent to 10 per cent.
Northmead Assembly has, however, proposed tax increase on alcoholic beverages and cigarettes by at least 10 per cent since the social costs of alcohol and cigarettes justify the proposed increase as medical conditions related to the products are paid for by tax payers.
The Non Governmental Organisation Coordinating Committee (NGOCC) called for the reduction of PAYE to at least 25 per cent. They have proposed that the tax-free threshold should increase from K500,000 to K800,000, being the cost of basic food basket as determined by Central Statistics Office (CSO).

NGOCC has further called for the reduction of VAT from 17.5 per cent to 10 percent across the board.

It has further suggested that mineral loyalties should be increased to bridge the gap for the losses in measures proposed for PAYE and VAT.
Alick Kaluba has also suggested two types of PAYE, one for Zambian citizens and another for non-citizens.

Kaluba proposed that Zambian citizens earning less than K500,000 should not attract any tax while non citizens earning K500,000 should attract 25 percent tax.
The Zambia Business Forum (ZBF) has called for the removal of duty and VAT on hand tools for farmers.

Meanwhile, the Zambia National Farmers Union (ZNFU) has suggested the reclassifying of Gypsum as a fertilizer in order to be exempted for VAT purposes.
The Ministry of Commerce and Trade proposed that imported raw materials should attract VAT at 7 per cent.

The Zambia Revenue Authority (ZRA) has suggested an increase in tax rate for farming income from 15 per cent to 35 per cent and increased company rate for companies manufacturing fertilizer from 15 per cent to 35 per cent.
Meanwhile, Celtel Zambia has suggested that foreign exchange losses incurred on loans used to purchase telecommunications equipment should be tax deductible.
The Ministry of Tourism has also called for the reclassifying of the tourism sector as a non-traditional export and reduce the corporate tax rate for the sector from 35 percent to 15 percent.

Zambia National Federation of the Blind (ZANFOB) has suggested that all tax should be removed from all businesses owned by blind and other disabled persons.

Labels: TAXATION

posted by MrK @ 5:55 AM