Maravi

ZCTU urges govt to increase PAYE threshold

ZCTU urges govt to increase PAYE threshold
By Kabanda Chulu in Kitwe
Fri 23 July 2010, 14:00 CAT

ZCTU president Leonard Hikaumba has challenged government to increase the pay as you earn (PAYE) threshold for tax exemption and adjusting the existing tax bands downwards for workers in the lower income brackets in order to reduce poverty among the working poor.

And Hikaumba has observed that the relative economic growth recorded during the
past few years has not translated into widescale job creation or broad-based
economic opportunities for the poor.

During the Friedrich Ebert Stiftung (FES) sponsored Zambia Congress of Trade
Unions (ZCTU) pre-2011 budget policy workshop in Kitwe on Thursday, Hikaumba
said government should consider the plight of the working poor in the 2011
national budget.

“At the same time government must take bold steps to start working towards
broadening the tax base seriously because a number of profitable businesses in
the informal sector remain largely untaxed and it is common knowledge that
billions of kwacha is turned over in the informal economy each year,” Hikaumba
said.

“For these reasons we challenge government to increase PAYE tax threshold
for tax exemption and adjusting the existing tax bands downwards for workers in
the lower income brackets so that poverty can be reduced among the working
poor.”

In the 2010 budget, PAYE tax exemption threshold stands at K700,000 and those
earning K800,000 to K1,200,000 per month are taxed at 25 per cent while those
earning between K1,200,000 and K4,000,000 fall in the 30 per cent tax band with
those earning above K4,000,000 falling in the 35 per cent PAYE tax band.

And Hikaumba said widespread poverty in Zambia meant that an estimated 64 per
cent of the population lives on less than US $1.00 per day.

“The relative economic growth recorded recently was concentrated on capital
intensive sectors of mining and construction and did not translate into wide
scale job creation or broad based economic opportunities for the poor, although
copper mining accounts for 75 per cent of our exports, it provides only one per
cent of direct employment overall,” said Hikaumba.

“The vast majority of Zambians rely on agriculture as the source of their livelihood hence we challenge government to prioritize agricultural needs both in the 2011 budget and the sixth national development plan.”

Labels: FRIEDRICH EBERT STIFTUNG, LEONARD HIKAUMBA, PAYE, ZCTU

posted by MrK @ 2:15 PM