Magande promises good news
Magande promises good newsBy Post Reporters
Friday January 25, 2008 [03:00]
ZAMBIANS should expect good news in this year’s national budget, finance and national planning minister Ng’andu Magande has said. And government sources have disclosed that Magande is expected to present a budget totalling about K13.76 trillion.
In an interview ahead of today’s presentation of the 2008 national budget, Magande hinted that Zambians should expect more details on the mining taxes, measures being put in place to address the effects of floods and empowerment of locals to participate in the country’s economy.
“They should expect more details on the mining taxes which the President announced and that should give them good news,” Magande said. “We want to operationalise the Citizens Economic Empowerment Commission; generally the mood is that people want to get involved in the economy and the budget should encourage them to invest into the economy.”
He said in light of the floods that have affected some parts of the country, the national budget would address the problems the floods have caused.
“We will also give the details in terms of the floods, we want to address that issue adequately and we want to work on the infrastructure that has been battered by the floods,” Magande said.
Magande said the new deal government had always been presenting good national budgets that have pushed the economy forward.
Magande further said a few years ago it was foreseen that there would be power deficit because of the government’s good economic policies that increase the demand for power. However, Magande said people again did not believe that but suddenly there is outcry for electricity. He said power outages were due to high demand for electricity.
“We foresaw that electricity deficit,” said Magande.
Many Zambians today expect finance minister Magande to reduce pay as you earn (PAYE) and other personal income taxes because of the expected higher revenue from mineral and company taxes.
However, it has emerged that this relief may not be much because revenue estimates for this year indicate that income taxes were likely to be increased through PAYE than company and mineral taxes, a situation that reflects the traditional reliance on workers contributions for tax revenues.
Government sources have indicated that this year, PAYE would account for just over K2.4 trillion while company income tax is likely to be at K1.3 trillion while the much anticipated mineral royalty taxes would bring in K72 billion from the previous (2007) K 67.5 billion.
On other key revenues, the sources revealed that government is expected to earn more from fuel levy, which is expected to contribute just over K250 billion from last year's target of about K200 billion.
The sources indicated that medical levy is expected to yield about K10 billion, which is a modest increase on the K8.7 billion targeted last year.
Other expected revenue targets include the increase in domestic value added tax (VAT) from last year’s K25 billion to slightly over K300 billion while import VAT would be around K3 trillion against last year’s target of K2.2 trillion.
Under customs and excise, the sources said that motor vehicles duty would be around K170 billion from last year’s K158 billion while duty on air time was expected to be increased from last year’s K102 billion to about K106 billion.
Other revenue from duties include that of clear beer, which is likely to be increased from K156 billion to about K160 billion while a marginal increase would be expected from that of opaque beer from last year’s K24.2 billion to about K29.9 billion.
The sources said that the government this year is likely to spend K20.7 billion at State House as compared to last year’s K19.1 billion while the agriculture and marketing programmes would get K267 billion as compared to last year’s K411 billion.
Under the constitutional and electoral reforms, the government is expected to spend about K300 billion as compared to last year’s K165 billion while for veterinary and livestock development, government is likely to spend about K20 billion as compared to K30.8 billion.
The sources disclosed that the government expects to raise about K4 trillion from income tax, K72 billion from mineral royalty tax, K2 trillion from customs and excise, K2.6 trillion from Value Added Tax (VAT).
Exceptional tax, which includes fuel and medical levies, would contribute a total of about K254, 292, 639, 947.
The sources disclosed that the government expects to get about K567 billion from fees and fines, and K12.8 billion from dividends.
The source said the government also expects to get K733 billion from programme grants and K1 trillion from project grants.
On expenditure, the sources disclosed that the National Assembly would receive about K163 billion, while the Electoral Commission of Zambia (ECZ) would get about K30 billion and the Auditor General’s office would get about K44 billion.
The source said the Ministry of Health would have a head total of about K1. 5 trillion while the Ministry of Education would get about K2 trillion.
The Zambia Police’s head total would be about K398 billion and the Teaching Service Commission’s head total would be about K 2.2 billion.
The source said Ministry of Energy and Water Development’s head total would be about K62 billion while that for the Ministry of Mines and Mineral Development would be about K42 billion and Ministry of Home Affairs K182 billion.
The source said the Ministry of Foreign Affairs would get a head total of K194 billion.
About K8. 9 billion would be spent on emoluments at Zambia’s mission in London.
And University of Zambia Development Studies Lecturer Dr
Labels: 2008 BUDGET, MAGANDE
posted by MrK @ 7:01 AM
2 Comments:
It's out. I've posted the highlights on mining at www.minewatchzambia.com - looks like a good start to me.
- 30% corporate tax (up from 25)
- 3% mineral royalites (up from 0.6)
- Profit tax upto 15% of taxable income (new)
- Variable windfall tax, upto maximum 75% of the copper price (new and I won't understand how important it is without working out where prices are now and how much will be raised)
- Capital allowances down to 25% a year (from 100% - good this was a big loophole)
- Capital expenditures ring fenced and only deductible when production starts. (good)
I ain't no economist but it all looks good to me! And it kicks off April 1 - so no need to wait for
negotiations. I think there are questions about what happens to the Development Agreements - are the companies still held to the commitments they made in them?
Alastair,
That is great news.
Ok, this discussion is continued here:
http://www.minewatchzambia.com/blog.html
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