Wednesday, February 04, 2009

Musokotwane cautions against discouraging investors

Musokotwane cautions against discouraging investors
Written by Chiwoyu Sinyangwe
Wednesday, February 04, 2009 11:24:49 AM

FINANCE minister Situmbeko Musokotwane has advised against creating an impression that Zambia’s failure to attract huge investments largely stems from it being the most corrupt country.

During a post-budget breakfast discussion organised by the Association of Chartered Certified Accountants (ACCA) Zambia chapter in Lusaka yesterday, Dr Musokotwane noted the need to create confidence and bring investments in the country in as much as corruption was being fought. He however admitted that corruption was endemic in the country.

“Yes, let us fight corruption but let us not create an impression out there that Zambia is the most corrupt country in this world and that is why it is not attracting investments. That is not true. Let us all work together, create confidence and bring in investments to this country as we fight corruption because that way, we shall move forward,” Dr Musokotwane said.

“I can’t deny that there is corruption in Zambia but we must always look at solutions.”

Dr Musokotwane said there was need to underplay the prevalence of corruption, saying even in the current scenario, the country could still continue to attract foreign direct investments (FDIs).

“There is corruption yes but let’s overplay things to imagine that it is only when there is zero corruption when you can attract investments,” he said.

“We know that our neighbouring countries and others who attract investments may be slightly better than us but I wouldn’t say they are 10 or 15 times better than us, we are almost at par. So, let us be careful, let us do much more to induce investments in this country because it is investments that are going to create the jobs and tax revenue.”

And Dr Musokotwane also defended the decision by the treasury to give more tax concessions to mining companies while making modest adjustments to personal taxes.

He also explained that the government was trying to balance on how the tax burden was going to be reduced between incomes coming to the pockets and the ability to sustain jobs.

Dr Musokotwane also said the government decided to increase the number of farming equipments to be exempted from duty to ensure that the sector absorbed people expected to be laid off owing to reduced industrial activities in the country.

“Our emphasis has been that we do something on pay as you earn (PAYE). This is why we have do so, but also this is the time that we are threatened with a possibility of so many job loses given this crisis. So, our thinking has been that can we do something to reduce the tax burden on the people who provide the jobs,” said Dr Musokotwane.

“Obviously, reducing PAYE is desirable but all it does is to improve your ability to consume whereas it does not address the challenge of the tax point of view like how to sustain the current jobs and create more.’’

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