Maravi

Chikwanka backs CSO's calls for windfall tax

Chikwanka backs CSO's calls for windfall tax
By Gift Chanda
Sat 26 May 2012, 12:43 CAT

ANY democratically-elected government that sets conditions to only favour investors betrays its people, says Council of Churches social and economic justice programme officer Nsama Chikwanka.

Commenting on calls by civil society organisations to reintroduce windfall tax in the mining sector, Chikwanka, a development expert, said there is need for the government to stop protecting the interests of investors at the expense of the people that ushered them into power.

Civil society organisations have stepped up calls for the reintroduction of the windfall tax on mines as the PF government prepares its first wholly developed national budget.

He said it is important for the government to establish that a country can only develop from the prudent utilisation of its various resources, both human and natural.

In this case, Chikwanka said the principal beneficiaries of Zambia's natural resource endowments should be Zambians and anything short of that is short-changing the owners of the land.

"It is betrayal of its people for a democratically-elected government to set conditions that support or favour the investors," Chikwanka said in an emailed response to a query.

"The story about ensuring that the goose is not killed should be viewed also from the point that we should not let the geese become so powerful as to start dictating how many eggs it should contribute. Any investment should not disadvantage locals."

He pointed out that at the moment, apart from the huge holes, traffic jams, finished roads, increased pollution and interim media statements, there is nothing to show for the boom in the mining sector.

"A walk to the Copperbelt tells the whole story; all roads leading to all major mining towns are in deplorable state and are death traps," Chikwanka said.

"The government needs to start governing instead of protecting the interests of investors."

He called on the government to involve everyone in the country's development agenda.

"Our greatest challenge is the unclear tax system for the country. Firstly, there are so many taxes in the sector, some of which are conflicting, and are responsible for the misunderstanding that is created when companies start giving their total contribution to the treasury. We need tax policies and systems that can be understood by all; at the moment, there is a system that works for and is only understood by government and sector investors. The current discourse is confusing to the common Zambian who is left to wonder how tax experts have failed to agree on this concept," Chikwanka said.

"So the challenge is for Zambia to harmonise its tax system that will be clear for all because at the moment, only the government and investors claim to understand what taxes are collected and how much.

"Any tax information that is coming from civil society and other interest groups is disputed."

He further noted that the other compounding factor to the whole tax debate in the mining sector is the secrecy surrounding the mining agreements.

International Monetary Fund country representative Perry Perone recently revealed that the Zambian government had agreed to conduct a comprehensive review of the mining tax regime.

"Until the government comes in the open to state the nature of the mining agreements, Zambians are justified in their speculations and cannot be blamed for concluding there is corruption and abuse of authority in the whole process," said Chikwanka.

Labels: CSO, DEVELOPMENT AGREEMENTS, IMF, MINING, TAXATION, WINDFALL TAX

posted by MrK @ 7:16 PM