Wednesday, February 20, 2013

(STICKY) World Bank partly to blame for bodies taxing private sector - Scott

World Bank partly to blame for bodies taxing private sector - Scott
By Moses Kuwema
Wed 20 Feb. 2013, 13:10 CAT

VICE-President Dr Guy Scott says the World Bank is partly to blame for the many quasi-government institutions that depend on taxing the private sector for their income. And Vice-President Scott says Zambia has a disjointed situation as far as interest rates are concerned.

During a meeting with visiting World Bank directors at his office and in response to a question from one of the directors Piero Cipollone, who wanted to know if the government trusts the indicators of doing business in the country and what they thought of them, Vice-President Scott said the cost of doing business in the country was vexed.

"If you are running a supermarket, you are likely to get inspections from four or five organisations coming to make sure that you are not selling stuff past its sell-by date, ZABS, the council. There is enormous explosion of quahogs of quasi or autonomous organisations type of things and depend on their income upon taxing the private sector and claiming that you are an environmental danger, health danger, and that you are over-charging or under-charging, you are violating the competition Act." There is a big issue in restructuring and you guys are partly to blame.

I mean over the years, it is you who have been saying 'let us have a project', we need a new institution to do the project, we don't want to work with these corrupt fellows here in this ministry department. We want a new whatever and then after three years the project closes and it becomes a predator on the system. I think that needs a careful survey," Vice President Scott said.

Vice President Scott said in Zambia, about 70 licences were required technically to do business.

"To actually be legal in Lusaka, you take about two years to set up your business because of all the people that are demanding licences off you, wanting to do inspections off you and I think that needs to be cut. I think it needs to be a bonfire of quahogs. We are part of the way there. It is interesting, you set up an institution to facilitate business and the first thing it will do is take the money that you give it…taxpayers' money and start building real estate for its offices and then for rent. And then you set up a real estate company, you have not set up anything else," Vice-President Scott said.

And Vice-President Scott said Zambia had one of the highest interest rates in the world.

He said most Zambians ought to have their own houses through mortgages but that this was not the case because of the short period of repaying.

"The only mortgage you can get is a 10 year one at 18 per cent or something like that, which you cannot afford. We have this bizarre structure which could be as a result of lack of competition. You would have thought that the current trade would have brought it down, through people coming in and having their money banked here, that would generate some competition and bring the rates down, but we are not seeing this," he said.

And in response to another World Bank director Rudolf Treffers who wanted to know how the Zambian government could use agriculture to reduce rural poverty, Vice-President Scott said the realistic opportunities for agriculture were there but could not be determined from the boardrooms.

He said there was need to be practical and also have practical entrepreneurs or innovators to support the government programmes.

Meanwhile, Treffers said it was important for his organisation to have a physical feel of how the situation was in this country.

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