Maravi

Windfall tax an illusion, says Musokotwane

Maybe dr. Musokotwane is the dumbest individual on the planet. The Windfall Tax doesn't 'tax 90% of profits'. He says "I draw technical expertise from IMF and World Bank" - the same organisation that told Edith Nawakwi that copper prices would not rise in her lifetime, back when they were $2,000 per tonne. This guy should just resign for being too stupid to be a finance minister. Apparently the concept of progressive taxation escapes him. Wow.

Windfall tax an illusion, says Musokotwane
By Ndinawe Simpelwe
Wed 09 Mar. 2011, 04:01 CAT

THERE is no need to worry about the increase in external debt because the economy is growing, according to finance minister Situmbeko Musokotwane.

And Dr Musokotwane has described the windfall tax on mines as an illusion that would never work anywhere in the world. Speaking on QFM’s Monday Night Live radio programme, Dr Musokotwane said foreign debt now stood at US$1.2 billion.

However, the US $1.2 billion figure given by Musokotwane is contrary to data in the Fifth National Development Plan, which indicates that Zambia’s total foreign debt stood at U$3.4 billion as at October 2009.

He said the debt had risen at a reasonable rate compared with the way it had increased in the past.

“We need to worry about reckless borrowing. But so far the borrowing has not been reckless. The debt has grown, but it should not worry us because the economy is also growing. There is no harm in borrowing if the economy is growing,” Dr Musokotwane said.

Dr Musokotwane said the treasury was expecting more growth in foreign exchange which would help settle some of the country’s debt.

Before attaining the Highly Indebted Poor Countries completion point in April 2005, Zambia’s debt burden stood at US$7.1 billion, a figure accumulated since independence.

Dr Musokotwane said the windfall tax was an illusion and its reintroduction was not under consideration. The orignal tax was an error by those who signed it.

“It is only in Zambia where we still have the debate on the windfall tax. There are a lot of mining countries in the world but none of them is using the windfall tax . . . People should admit it was an error and has been corrected,” said Dr Musokotwane.

“I draw technical expertise from IMF and World Bank, which do not support windfall tax. If you are taxing mining companies about 90 per cent of their profits, it means there is no incentive for them. That is what a windfall tax does to the mines.”

Labels: SITUMBEKO MUSOKOTWANE, STUPIDITY, WINDFALL TAX

posted by MrK @ 2:45 PM