Cut corruption rather than over-taxing people – Chipimo

THERE’S no inspiration in this budget and clearly the goal is to try and contain the big expenditures that are there, National Restoration Party president Elias Chipimo has noted. And Chipimo says the government must focus its energy on cutting that corruption and misappropriation of public funds rather than over-taxing Zambians. Commenting on the 2019 national budget presented by finance minister Margaret Mwanakatwe on Friday, Chipimo said it was unfortunate that instead of seeing more attempts at managing and controlling the high expenditures over the last few years, the budget was more rhetoric.

On Friday, Mwanakatwe unveiled the K86.8 billion national budget for 2019. This is K15.2 billion more than the 2018 budget that stood at K71.6 billion. The budget represents 28.9 per cent of the gross domestic product (GDP). Of the total budget, 64.6 per cent will be domestically financed while only 2.2 per cent support will come from cooperating partners. The balance of 33.2 per cent will come from bills and bonds, which are sometimes sourced locally or internationally.

“Unfortunately, we are seeing more of the same with this budget. There has been no inspiration and clearly the goal is to try and contain the big expenditures that are there,” Chipimo said.

“Unfortunately, instead of seeing more attempts at managing and controlling the expenditure that has been happening over the last few years, we are seeing more words…if you listen to the speech from [former finance minister] Mr Chikwanda if you listen to the speech from [former finance minister Felix] Mr Mutati, there is no difference on what is being said about public finance management, and that’s what we needed to see in this budget.”

He said the proposal to reintroduce sales tax would see manufacturers pass on the cost in that new tax to a consumer.

“The other big thing is that we are seeing the removal of VAT. The proposal from the minister is that we are now going to reintroduce sales tax and what that is going to mean is that costs and prices will now go up,” Chipimo said.

“The manufacturers and other people who are having to pay VAT would claim it back and would not increase the cost of doing business but now they can’t claim it back and it’s a straight introduction of a new tax which will now increase the cost of their operations…they will now pass on that cost to a consumer.”

He said the budget had nothing for the youth and the unemployed who were entering the job market in huge numbers. Chipimo said there was need for an energized focus on cutting of corruption, mismanagement, misallocation and the misappropriation rather than taxing people. He said Zambians needed to see more creativity and remedial measures to excessive expenditure in an effort to getting value for money through the procurement system.

“Every single day, one thousand new Zambians enter the job market, 400,000 every single year and if you look at the numbers that are being proposed in terms of job creation 15,000, 20,000…this is not going to cover the challenge that we are facing as a nation in terms of our youths, in terms of the unemployed,” Chipimo said.

“So we needed to see more bite, we needed to see something much more creative and something that would ensure that the excessive expenditure, that this idea of not getting value for money when we go through our procurement system, this needs to stop because we are spending two, three, four times of what we should be spending on things that are being procured on our behalf of the government. That’s where we need to focus our energy, on cutting that corruption, cutting the mismanagement, misallocation, the misappropriation,  that is where we must spend our energy and effort not taxing people.”

He said the tax regime in the mining sector was changing and that “some of the changes might be positive”.

However, Chipimo said things should be done by consulting all stakeholders involved so that there was no reduction in investor activity for the sake of trying to raise more money, which “we are misapplying and not spending in a right way.”

Source: The Mast