Maravi

‘Govt has continued to ignore high PAYE’

‘Govt has continued to ignore high PAYE’
Written by Fridah Zinyama
Monday, February 02, 2009 3:26:14 AM

LUSAKA economist John Kasaga on Saturday said it is unfortunate that government has continued to ignore the issue of high Pay As You Earn (PAYE) taxes for employees.

And finance minister Dr Situmbeko Musokotwane has said this year’s budget has tried as much as possible to capture most of the recommendations that were provided by different stakeholders.

During an Economics Association of Zambia (EAZ) 2009 post-budget analysis in Lusaka, Kasanga questioned why this year’s budget had again failed to address the issue reducing PAYE for the 350,000 employees in the formal sector.

“Even as we are facing an economic meltdown, government does not seem to understand the need for employees to have more money in the pockets in view of high standard of living that the country is experiencing,” he said.

Kasanga questioned why only 350,000 people should carry the tax burden of the country when big companies could equally contribute.

“How do few individuals pay more tax than big companies that make a lot of money?” he asked.

Kasanga said the old excuse that the government needed revenue should not be used to penalise a small percentage of the population.

And Kasanga further added that the government should also consider making it mandatory for political parties to disclose how much money they received from well wishers.

“For governance’s sake and transparency, let government consider doing this because most of these monies could be taxed as well,” he added. “I know you will get serious opposition from your colleagues but I believe that it is something that needs to be done.”

Kasanga also said the government should come up with a statutory limit on how long it should take to pay suppliers, as it had been observed that the government took to offset its debt.

“I think that government should come up with a timeframe of 60 days in which they are required to pay their suppliers. Government has greatly contributed to the high poverty levels amongst Small and Medium Enterprises (SMEs) as they take long to pay them,” he said.

Kasanga proposed that controlling officers should be held accountable for not paying suppliers within the stated time frame.

He also advised the government to come up with incentives that would benefit all economic sectors and not just foreign investors.

Kasanga further wondered why the government increased customs duty on cellular phone handsets from five to 15 per cent just because a particular investor was about to start production.

“The entire manufacturing sector has been calling for government to come up with special incentives for them but government has not paid attention. Then why should a company that has barely started production be protected at the expense of the entire sector?” he asked.

Kasanga said this year’s budget needed to address all the needs of priority sectors and not just selected individuals as it was sending a wrong signal to the rest of the business community.

And Dr Musokotwane said it had not been an easy task to come up with this year’s budget because of the challenges of the global financial crisis.

He explained that the government had decided to take up suggestions that would help to tackle most of the critical problems that the country was experiencing.

“We have paid particular attention to infrastructure because we believe that therein lays the answer to most of the problems that the country is experiencing,” he said. “Schools, clinics, hospitals, roads and farm blocks have been earmarked for construction this year.”

Dr Musokotwane explained that the government had cut its expenditure on unnecessary workshops, vehicles and training as a means of reducing costs.

Labels: 2009 BUDGET, JOHN KASAGA, PAYE

posted by MrK @ 3:26 AM