Maravi

Celtel urges government to restructure tax system

Celtel urges government to restructure tax system
By Fridah Zinyama
Monday June 16, 2008 [04:00]

CELTEL Zambia managing director David Venn has urged the government to restructure the tax system in the country as it leads to high cost of production. But Zambian Airways chief executive officer, Mutembo Nchito, said it would not be possible for the government to reduce taxes as it had no other way of meeting its social responsibilities.

During the Euromoney Investment conference at Pamodzi Hotel looking at ‘How business friendly Zambia is’ last week, Venn said the tax regime was very high in the country, a situation which had led to an increase in the cost of production for most companies.

“As a company, government gets about 55 per cent tax on all phone calls that are made from us as a mobile company,” he said.

Venn said taxes needed to be more evenly spread so that the cost of doing business could be reduced in the country.

But Nchito said the public expected the government to meet its social responsibilities but it could not do so without adequate funding.

“Government has no way of funding the health and education sectors apart from these taxes,” he said. “There has always been an aversion to paying tax by the public but they should understand that taxes are necessary if government is to meet its obligation.”
Nchito said paying tax should be an attitude that is well accepted by most companies as it is a good way of contributing to the country’s development.

And Lafarge Cement Zambia managing director, Tom Ehrhart, said the government should consider the cost of doing business plus the tax structure as it led to the high cost of doing business in the country.

“Once other aspects to doing business in the country are addressed, it will help to improve the business environment in the country,” Ehrhart said.

Former commerce minister Dipak Patel said the tax base was not broad therefore very few companies were paying taxes at the expense of the majority.

Patel said the challenge at the moment was for the government to broaden the tax base if it is to increase its revenue base.

Labels: CELTEL, TAXATION

posted by MrK @ 12:04 AM