Maravi

(LUSAKATIMES) No windfall tax, Chikwanda restates

No windfall tax, Chikwanda restates
TIME PUBLISHED - Thursday, December 1, 2011, 9:08 am
Finance Minister Alexander Chikwanda

FINANCE Minister Alexander Chikwanda has reiterated that it would be unwise for the Patriotic Front (PF) Government to reintroduce the windfall tax when metal prices on the international market are unstable and visibly trending downwards.

And Parliament last evening approved the K48 billion allocated in this year’s Budget to the Electoral Commission of Zambia (ECZ) with Kalomo Member of Parliament (MP) Request Muntanga (UPND) urging the House to increase the K2 billion reserved for by-elections.

Concluding the policy debate on the estimates of expenditure for 2012 in Parliament on Tuesday evening, Mr Chikwanda expressed disappointment that former MMD ministers that abolished the windfall tax were now championing its re-introduction.

He told the House that the PF Government was very responsible, dignified and had the full mandate of the people of Zambia and as such would not play to the gallery and act impulsively just because someone was advocating the re- introduction of windfall tax.

The minister said it was extremely important to understand that the measures he had announced in the 2012 Budget address would ensure that the Government got some revenues while the “cow that produces the milk” was left to survive. “It would, therefore, be unwise for the Government to introduce windfall tax when metal prices are unstable and are now visibly trending downwards.

“It is for this reason that I am disappointed by our colleagues who were in Government yesterday and abolished the windfall tax; but are now calling for its re-introduction. Are they really being genuine, constructive and patriotic?,” he wondered. He said the former MMD leaders were not being objective in their debates on windfall tax and were being unpatriotic because their debates were not bordering on stability of investment, ensuring workers security of tenure and facilitating sustainable mobilisation of resources.

“Mr Speaker, allow me to talk about our extremely limited fiscal space or the resource envelop. Against overwhelming legitimate demands by our people all over the country, aBudget of K27 trillion or US $5.5 billion is just a tiny drop in the ocean.

“In the developed countries, our National Budget cannot even cover the annual expenditures of single big universities. Our economy was left by the previous Government at an exceedingly low ebb. The shanty compounds in which the majority of our citizens in urban habitats live have inadequate necessities such as water, sanitation and electricity,” he stressed.

He told the House that Zambian villages in far flung areas had barely seen any development and were even condemned to perpetual neglect and abandonment with rural poverty at over 77%.

“In the midst of all this, the previous Government maintained a budget that was largely targeting consumption in the public service at the expense of poverty reduction and infrastructure development nationwide. This sums up the immensity of the challenge we face collectively as leaders,” he said.

Mr Chikwanda however, hailed the support the Budget received but regretted that most brilliant ideas could not be embodied in the 2012 estimates. The Government would, however, consider the ideas in subsequent fiscal years.

On concerns raised on PAYE, the minister noted that the figure of about 80,000 which he discussed in his speech related to workers who earn between K12 million and K24 million per year and would, therefore, not be liable to PAYE.

“This figure is also in addition to about 112,000 workers who are already not paying PAYE because they earn K12 million per year or less. This means that if you add 80, 000 employees to the already existing 112, 000 employees who are off the PAYE tax roll, then more than 192, 000 workers who are in formal employment will be off the PAYE tax roll,” he said.

He explained that the balance of 500,000 formal sector employees who are in higher income brackets would also benefit because they would actually not be subjected to PAYE for up to the first K24 million of their total annual earnings.

“The way the tax bands have been realigned will entail more benefit for tax payers. This is true empowerment and more money in the pocket of our citizens.

Mr Speaker, the explanation above has demonstrated how our tax package concessions will yield K1 trillion extra disposable income for all workers that earn taxable incomes,” he noted. The minister noted that he would see how he could address concerns on calls to increase Constituency Development Fund (CDF).

Mr Muntanga in supporting the Budget allocation for the ECZ told the House that the K2 billion reserved for possible by-elections was not enough owing to the more than 50 petitions before the courts of law which could result into a mini-general elections if nullifications occurred.

[Times of Zambia]

Labels: MINING, REQUEST MUNTANGA, TAXATION, WINDFALL TAX

posted by MrK @ 11:34 PM