Maravi

Stop depending on PAYE as major source of income, Mwila tells govt

Stop depending on PAYE as major source of income, Mwila tells govt
Written by Kabanda Chulu and Fridah Zinyama
Sunday, February 08, 2009 8:18:31 PM

PATRIOTIC Front (PF) chairperson for labour Davies Mwila has challenged the government to stop depending on pay as you earn (PAYE) as its major source of income.And Zambia Union of Financial Allied Workers (ZUFIAW) president Cephas Mukuka has urged the government to stop the tendency of “kneeling down” when collecting taxes from the mines at the expense of Zambian workers.

Out of the K15.27 trillion 2009 budget, K11.7 trillion is expected to come from domestic revenue, K2.6 trillion from PAYE, K2.5 trillion from value added tax (VAT), K1.4 trillion from import duties and K1.6 trillion from excise duties, K308 billion from fuel levy while the remaining K2.7 trillion would be financed by cooperating partners under the Overseas Development Assistance (ODA).

But Mwila expressed disappointment at finance minister Situmbeko Musokotwane’s decision to marginally increase the exemption threshold from K600,000 to K700,000 while expecting to raise revenue from the suffering workers.

“We are disappointed because we expected a huge exemption threshold that can allow workers to look after their families well but this exemption is not much looking at the current economic situation and how will this government get those enormous taxes when the targeted people are lowly paid?” said Mwila.

“Also, the tax free exemption for terminal benefits is not much and will not help the pensioners and we expected it to be about K50 million and not K25 million.”

And Mukuka said the marginal increase in PAYE exemption threshold would reduce the purchasing power of Zambian workers.

“The tendency to depend on PAYE just because it is not negotiable is not good and why should government kneel down when getting taxes from the mines? Is it because they have to rush to PAYE and other consumer taxes? This dependence will erode the purchasing power of Zambian workers,” Mukuka said.

“We expected the exemption to be below K1.5 million and not K700, 000, especially that only a few people in formal employment will shoulder the burden of paying these taxes.”

He said the government should not just be a spectator in the national economy and entirely depend on workers’ taxes.

“The issue of diversification started with former president [Kenneth] Kaunda but the ones that succeeded him have turned economic diversification a political song by giving away all resources to foreigners,” said Mukuka.

“So instead of being a spectator and entirely depend on workers’ contributions, this government can do better to broaden the tax base by revamping industries such as Mansa Batteries, Luangwa Bicycle plant, Mongu Cashew Nut plant, Livingstone Motor Assembly, among other industries.”

Meanwhile, the Zambia Business Forum (ZBF) has described this year’s budget as pro-private and commended government for coming up with policies that supported the growth of the private industries. ZBF executive director Reginald Mfula said the budget had taken into account the high cost of doing business which had been a major concern for the manufacturing sector.

Mfula however said the budget had failed to clearly outline how the government was going to deal with the high inflation the country was currently experiencing since last year.

“I feel that government has also not addressed the issue of how it is going to deal with domestic debt,” he said.Mfula explained that inflation and domestic debt were cardinal issues that had a bearing on the performance of the economy.

“The budget is also not very clear about what government is going to do about the unstable exchange rate,” said Mfula. “We need a stable local currency for planning purposes.”

Labels: 2009 BUDGET, CEPHAS MUKUKA, DAVIES MWILA, PAYE, PF, WINDFALL TAX, ZUFIAW

posted by MrK @ 8:18 PM