Maravi

Govt tax adjustment insignificant – JCTR

Govt tax adjustment insignificant – JCTR
Written by Florence Bupe
Friday, February 13, 2009 7:45:29 AM

THE Jesuit Centre for Theological Reflection (JCTR) has observed that the
adjustment in the income tax exemption threshold from K600,000 to K700,000 is insignificant to improve living standards of Zambians.

According to a statement released by the organisation, the basic needs basket (BNB) for a family of six as at January 2009 stood at K761,550, up from K751,550 in December 2008.

JCTR stated that there would practically be no increase in household consumption resulting from the K100,000 increase in the tax exempt threshold.

“While it is commendable that as a fiscal measure, the government has revised upward the income tax threshold from K600,000 in 2008 to K700,000 in 2009, essentially the K100,000 increment has been eroded by the high inflation rate experienced in 2008. Therefore, in real term, the increase in people’s disposable income as a result of the adjustment is insignificant,” the report stated.

The report further stated that to meet the requirements for other non- food items such as water, electricity and housing, a family of six in Lusaka needed K1,425,430, an increase of K242,130 from the December 2008 figure of K1,183,300.

The increase was mainly attributed to a rise in the cost of housing.

JCTR social conditions programme coordinator Miniva Chibuye observed that the increase in the cost of living would lead to increased vulnerability in most households.

“Two major fundamentals should be followed by government to respond to this vulnerability. Firstly, despite the global economic situation, the issue of low wages paid to the Zambian employees needs to be examined with a view to adjusting upwards the minimum wage,” stated Chibuye.

“Secondly, to address effectively the challenges being faced from both the continuous increase in food prices, productivity in every sector of the economy and at every level must be emphasised.”

Labels: 2009 BUDGET, JCTR, PAYE

posted by MrK @ 7:43 AM