Maravi

(LUSAKATIMES) Government won’t re-introduce windfall tax – Veep

COMMENT - This is a direct betrayal of the electorate. The Zambian state must collect the $1.3 billion a year it is owed. Anything less than that is an insult. The attempt to paint income tax by workers as taxes paid by the mines is trickle down brainrot at it's worst. If it is the same, then why don't the mines object? It doesn't bare two seconds of contemplation. Also, is extremely disrespectful to the people of Zambia, that openness about decisions of this magnitude only takes place after the fact, after the decision has been made. This is not democracy.

Government won’t re-introduce windfall tax – Veep
TIME PUBLISHED - Tuesday, November 15, 2011, 8:28 am

VICE-PRESIDENT Guy Scott has said the Patriotic Front (PF) government will not re-introduce the windfall tax to save the economy from collapsing and urged Zambians to seek relief in the US$200 million royalty tax that has been gained from mining companies.

Dr Scott, who was reacting to statements by some trade unions and stakeholders that the PF cheated people using the windfall tax said the government had managed to remove US$200 million from the mining companies and transferred it to the workers in form of Pay-as-You-Earn(PAYE).

Dr Scott explained that whether the money drawn from the mining companies would be referred to as windfall tax or mineral royalty, the fact remains that the Zambian government had gained a huge amount of money and relieved workers from paying high taxes.

[You did not collect what was owed and is owed, and is going to be owed next year. If copper prices don't collapse in between, which the PF has no control over. When prices return to normal, the windfall will have gone. Mining companies will be gone too. - MrK]

He said the new PAYE in the 2012 national budget was the start of better things to come while the taxation system was still under review. The vice president said the US$200 million gained from the increased mineral royalty tax had been imposed on the mining companies to close the gap created by the reduction in thresholds on PAYE and seeks to earn ordinary Zambian workers an average of K1 million on their take-home-pay.

[Now that is all fine and dandy, but it is no $1.3 billion in taxes - income tax, and dividends to ZCCM-IH, which is what is owed every year, with the present taxation system. And it will be easily collected through the Windfall Tax. So collect it, or get out of the way. - MrK]

In an interview in Lusaka yesterday, Dr Scott said the increased mineral royalty tax had not reflected in the 2012 national budget because the amount had been captured by the mineral royalty tax. The vice president said the mineral royalty tax was the best form of tax because it stops mining companies from cheating government in terms of how much they were making.

[Then raise it to 20% of turnover, and drop all other taxes. The mineral royalty tax IS a great tax, but 6% is not enough. Plus, I want to see the return of all the taxes that have not been paid since privatisation. - MrK]

Dr Scott said the government had not stopped managing the tax system to ensure that it benefits the Zambian people. He said the tax was determined by the volumes of copper they had sold internationally and that systems had been out in place to ensure that Zambians benefit from the system.

Union president Mundia Sikufele said in Kitwe yesterday that the union felt betrayed because the windfall tax was one of the major items the PF used during the campaign.

“What matters is how much the mining companies will contribute to the national budget whether it is called windfall tax or mineral royalties. Our aim was to save at least US$200 million so that it goes to the workers in form of tax relief,” Dr Scott said.

[$200 million is still $1100 million short. - MrK]

The vice president said the government had succeeded in removing US$200 million from the mines to transfer it to the workers as the PF administration moves to meet its campaign promises.

The new budget has provided for the tax free bands that start from a minimum of K2 million that will fall out of the tax bracket which means that the workers earning that amount would not be subjected to PAYE.

But National Union of Miners and Allied Workers (NUMAW) has questioned the Government for what it called back peddling on the re-introduction of the windfall tax. Union president Mundia Sikufele said in Kitwe yesterday that the union felt betrayed because the windfall tax was one of the major items the PF used during the campaign.

And Chamber of Mines general manager Fred Bantubonse said it was important that the Government realised that dialogue with stakeholders before the re-introduction of windfall tax was the way forward. HE Civil Servants and Allied Workers Union of Zambia (CSAWUZ) has also urged Government to pursue the introduction of windfall tax if Zambia was to move forward.

Meanwhile, the German Government is expected to send its director of Southern Africa for the Ministry of economic corporation and development Dr Ingolf Dietrich to Zambia for talks with the minister of Finance Alexander Chikwanda. The talks would establish entry points in the national budget which the German Government would fund the one per cent that had remained for donor partners. In an interview in Lusaka on Sunday, German Ambassador to Zambia Frank Meyke said the discussions will take place on November 29 and November 30 November, 2011.

Mr Meyke said the German government was impressed with the national budget because it gave workers greater relief on their take-home pay which would promote investments and saving.

[Times of Zambia]

Labels: CHAMBER OF MINES, FREDERICK BANTUBONSE, GUY SCOTT, MINING, PAYE, PF, TREASON, WINDFALL TAX

posted by MrK @ 12:40 AM