Maravi

Parliament urges govt to increase tax threshold

Parliament urges govt to increase tax threshold
By Mutuna Chanda
Friday March 07, 2008 [03:00]

THE Parliamentary Committee on Estimates has described as inconceivable government’s proposal of K600,000 as tax threshold and proposed to have it increased to K1 million. And chairperson of the committee Godfrey Beene has expressed concern over the use of the anticipated income from the mining sector after the new tax regime is effected.

Presenting the committee’s report on the proposed Income Tax Amendment Bill of 2008 in which finance minister Ng’andu Magande proposed to increase the tax-free threshold on employees’ incomes from K500,000 to K600,000 and the new mining taxes in Parliament on Wednesday, Beene said the government seemed not to have a criteria on which to base the minimum taxable amount of workers’ incomes.

“Research Mr Speaker, shows that the essential food basket for a family of six in Lusaka currently stands at K1,835,300,” Beene said. “Your committee urges government to move an amendment so as to increase the threshold to at least K1 million.”
But Magande said while many people had advocated a higher increase in the tax threshold, this could not be achieved in a single year.

And Beene urged the government to consult stakeholders including members of parliament over the utilisation of the revenue from the mines.
“Mr Speaker while commending government for this initiative, your committee is concerned about the utilisation of the anticipated income from the mining sector especially that it is not provided for in the 2008 budget,” Beene said.

He however said the new tax regime on the mines should be implemented immediately.
And when the Value Added Tax (VAT) Bill came up for second reading, Beene recommended that the VAT rate be reduced to 14 per cent instead of the proposed 16 per cent.

The government in this year’s budget reduced Value Added Tax rate from 17.5 per cent to 16 per cent.

But Beene said reducing the VAT rate further to 14 per cent would discourage tax evasion, especially at border entry points.
The Customs and Excise Amendment Bill also came up for second reading.
All the three bills passed the second reading and come up today at committee stage.

Labels: 2008 BUDGET, INCOME TAX AMENDMENT BILL 2008, WINDFALL TAX

posted by MrK @ 6:56 AM