Monday, April 28, 2014

UNZAWU calls for windfall taxes

By By Edwin Mbulo in Livingstone
Wed 01 Jan. 2014, 14:00 CAT

UNIVERSITY of Zambia and Allied Workers' Union has joined calls for the reintroduction of windfall tax on mines. Union president George Katapazi said Zambians are not benefiting much from the mines and the reintroduction of the windfall tax would change the tide.

Katapazi in an interview said the government was doing well on infrastructure development but that this was not backed by a broad revenue base.

Finance minister Alexander Chikwanda last week said the government cannot be dictated to by feelings coming from the streets on the issue of windfall tax. His comments followed widespread calls for the reintroduction of the windfall tax which was scrapped by Rupiah Banda's government in 2009.

The windfall tax, introduced in 2008 by Levy Mwanawasa's government, sought to raise not less than US$415 million annually during periods of high copper prices on the international market.

For copper, the windfall tax was pegged at 25 per cent at a price of US$2.50 per pound, but below US$3.00 per pound; 50 per cent for the next 50 cents increase in price and 75 per cent when prices are about US$3.50 per pound. Katapazi said with an increased revenue base through the reintroduction of the windfall tax, the government would be able to embark on other developmental projects apart from those already started.

"What the government has embarked on is great in terms of infrastructure development such as the roads, stadiums, schools, clinics, administrative offices for new districts and hospitals, but it needs a broad revenue base for new developmental projects," said Katapazi.

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