Wednesday, February 06, 2008

(TIMES) Treasury officials sent packing

Treasury officials sent packing
By Times Reporter

THE parliamentary estimates committee yesterday sent back the team led by acting Secretary to the Treasury James Mulungushi because they did not present satisfactory explanations on the new mining tax regime. Dr Mulungushi was in the company of Zambia Revenue Authority (ZRA) Commissioner General and other senior members of staff from the Ministry of Finance and National Planning.

Dr Mulungushi and his team were asked to prepare a fresh report that would satisfy the committee chaired by Itezhi Tezhi MP Godfrey Beene, and present it by tomorrow. Mr Beene described the report by Dr Mulungushi as unsatisfactory and ordered him to prepare a fresh one, which should be presented before the committee by tomorrow.

Mr Beene told Dr Mulungushi that the committee members were not satisfied because the report left out key details of the proposed windfall tax on copper mines.

Dr Mulungushi had also said that Government plans to open a special account at the Bank of Zambia (BoZ) to keep the excess revenue from the mines.

Dr Mulungushi further said that Government has set up a committee to plan on how the projected revenue of US$415 million would be raised under the new tax regime.

This prompted the committee to question why the projected revenue of US$415 million was not included in the national budget. The committee argued that it is only parliament that has the authority to approve any expenditure and not the executive.

As a committee, we are looking at the legal position on new mining tax and the position on the setting aside of the excess revenue and why is this money not included in the budget. We are disappointed because you have failed to give us the legal position on these important matters,” Mr Beene said.

And appearing before the same committee Zesco managing director Rhodnie Sisala said the demand for electricity increased from 1,447 MW in 2006 to 1,605 MW in 2007 attributing it to the increased activities in mining, agriculture, commerce, tourism and others sectors.

Mr Sisala said that this year, the demand for electricity is expected to rise as more investment is anticipated in various sectors. He however assured the committee that the savings from Pay As You Earn and Value Added Tax (VAT) would be channeled into investment.

“The power deficit is likely to continue till December 2008 when most of the machines are expected to be back in service. This scenario will translate into load shedding on most retail customers.

“ This situation is expected to improve as upgrade generators are brought back into service from June 2008,” Mr Sisala said.

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