[Zambia] High taxes hit citizens in new Budget

As Zambia’s copper revenues dwindle the country’s government has introduced further taxes in an attempt to make up the cash deficit, Zawya reports.

Finance Minister Felix Mutati announced steep increases in taxes including Pay As You Earn (PAYE).

“Mr Speaker, in coming up with the proposed revenue measures, I have sought to increase the level of domestically raised resources while at the same time ensuring that the burden of taxation is borne equitably,” he told Parliament when presenting the Budget.

“Mr Speaker, many of our citizens and stakeholders have implored the Government to take measures to ensure that the tax base is broadened, made fairer and enhances domestic resource mobilisation.”

While extending the exempt threshold from K3,000 to K3,300, PAYE has reportedly leapt up from 35 per cent to 37.s per cent for those earning more than K3300 and above.

The minister maintained the 10 per tax on rentals for housing units.

Zambians will also have to be prepared for new and increased VAT on imports ranging from food to motor vehicles.

Zambia is one of the countries with the African continent’s highest taxes.

However, the new taxes are in contrast with the platform the current government used to gain power in 2011.

Riding on the crest of public discontent, Micheal Sata - the founder of the Patriotic Front (PF) who died in 2014 - promised Zambians he would put more money in their pockets.

He said his administration would raise the standard of living of the people by lowering taxes.

But after he came into power in 2011 Sata, as PF and national president, embarked on a countrywide construction and rehabilitation programme. Under the Sata administration new universities, schools, hospitals, clinics health centres and other infrastructures were constructed and he opened up more roads and rehabilitated hundreds, constructed bridges and rehabilitated fallen ones as part of a bid for re-election in 2016.

Critics argue that while these projects were for the public good, they were largely not budgeted for and many were embarked on without consulting the treasury.

Additionally, commodity prices fell affecting the Chinese economy and countries that heavily depend on China for trade.

In Zambia, copper production fell dramatically, as did the national metal revenues. Plus the local currency - the Kwacha - dropped to its lowest levels against the United States dollar and other convertible currencies.

Drought swept through the entirety of Southern Africa discharging an unprecedented lower crop yield in many countries in the region.

The low water level in many rivers including the Zambezi and the Kariba dam dropped too.

The result of the low water levels at Kariba was the emergence of one of the country’s most severe power shortages in the history of the 52-year-old nation.

The power deficit resulted in poor performance in the industry including the mines as ZESCO, the country’s power utility firm embarked on rationing of electricity which in practical terms meant eight-hour blackouts daily.

Source: Zawya

(Quote via original reporting)

As Zambia’s copper revenues dwindle the country’s government has introduced further taxes in an attempt to make up the cash deficit, Zawya reports.

Finance Minister Felix Mutati announced steep increases in taxes including Pay As You Earn (PAYE).

“Mr Speaker, in coming up with the proposed revenue measures, I have sought to increase the level of domestically raised resources while at the same time ensuring that the burden of taxation is borne equitably,” he told Parliament when presenting the Budget.

“Mr Speaker, many of our citizens and stakeholders have implored the Government to take measures to ensure that the tax base is broadened, made fairer and enhances domestic resource mobilisation.”

While extending the exempt threshold from K3,000 to K3,300, PAYE has reportedly leapt up from 35 per cent to 37.s per cent for those earning more than K3300 and above.

The minister maintained the 10 per tax on rentals for housing units.

Zambians will also have to be prepared for new and increased VAT on imports ranging from food to motor vehicles.

Zambia is one of the countries with the African continent’s highest taxes.

However, the new taxes are in contrast with the platform the current government used to gain power in 2011.

Riding on the crest of public discontent, Micheal Sata - the founder of the Patriotic Front (PF) who died in 2014 - promised Zambians he would put more money in their pockets.

He said his administration would raise the standard of living of the people by lowering taxes.

But after he came into power in 2011 Sata, as PF and national president, embarked on a countrywide construction and rehabilitation programme. Under the Sata administration new universities, schools, hospitals, clinics health centres and other infrastructures were constructed and he opened up more roads and rehabilitated hundreds, constructed bridges and rehabilitated fallen ones as part of a bid for re-election in 2016.

Critics argue that while these projects were for the public good, they were largely not budgeted for and many were embarked on without consulting the treasury.

Additionally, commodity prices fell affecting the Chinese economy and countries that heavily depend on China for trade.

In Zambia, copper production fell dramatically, as did the national metal revenues. Plus the local currency - the Kwacha - dropped to its lowest levels against the United States dollar and other convertible currencies.

Drought swept through the entirety of Southern Africa discharging an unprecedented lower crop yield in many countries in the region.

The low water level in many rivers including the Zambezi and the Kariba dam dropped too.

The result of the low water levels at Kariba was the emergence of one of the country’s most severe power shortages in the history of the 52-year-old nation.

The power deficit resulted in poor performance in the industry including the mines as ZESCO, the country’s power utility firm embarked on rationing of electricity which in practical terms meant eight-hour blackouts daily.

Source: Zawya

(Quote via original reporting)