October 25, 2006

Mwanawasa to cut taxes after election / Sata denies 'parallel government'

Zambia will cut personal taxes and those on foreign firms investing in rural areas in 2007, President Levy Mwanawasa has promised. He also pledged to maintain a policy of fiscal discipline and to continue a battle against graft. The government would announce new tax relief measures in the 2007 budget in January, following criticism over high taxes during the election campaign, he said in a speech at the opening of parliament. Taxes, which the main opposition Patriotic Front flagged to highlight the plight of poor Zambians during campaigning, have been a divisive issue in the country. "Zambians spoke clearly (during the elections) and we will reflect on their concerns and implement those that can immediately be done," he said. Zambian workers pay up to 30 percent in personal income tax while corporate tax is pegged at 35 percent and value added tax at 17.5 percent. Customs duty on imported equipment is in the high 20s.

The President also emphasised that the government would also introduce tax rebates for investors in the farm sector as part of plans to diversify the economy from copper and cobalt mining to agriculture. Mwanawasa, whose battle against corruption was focus of his first five years in office, also pledged to maintain fiscal discipline and fight corruption. Furthermore, he also emphasised that the main focus for his next five years would be to create jobs and wealth, reduce poverty and improve health, education and social service delivery.

The defeated presidential candidate Michael Sata, has in the meantime denied plans to establish a parallel government in the areas where his party won an overwhelming majority, including the capital, Lusaka, and the country's industrial heartland, Copperbelt Province. „Our brother [Mwanawasa] will be governing the State from his state house, and we shall be governing the people through our councils in Lusaka, Copperbelt, Luapula and Northern provinces," Sata said. Asked by the media whether his plans were, in effect, a parallel government, he replied: "This is not a parallel government. It is local government, which is independent of central government. I am only going to effect the autonomy." Sata also outlined a number of avenues that PF-dominated councils were exploring to raise the necessary finance to improve housing, upgrade townships, reduce land taxes, and reintroduce public nursery schools and recreational facilities. Among his proposals were the local collection of a fuel levy, which has previously gone to central government, and a review of all business agreements, which could include removing preferential tax concessions. "With the help of our MPs we shall critically look at the exact trade agreements between Zambia and China, and review them, since we are also in control of the Copperbelt, where the Chinese are mining our copper. "Give us just 90 days and you will see us delivering what we promised you ... because we know where the money is, and we have to get it for the Zambian people," Sata said.

In the meantime, two Church Organizations have expressed lack of confidence over President Levy Mwanawasa’s re-affirmation to fighting corruption when he opened. Council of Churches Zambia (CCZ) Rev Japhet Ndhlovu said in an interview that, generally the commitment by Mwanawasa was welcome but that it lacked clarity. He said Mwanawasa should have given pointers on how the Government intends to strengthen the Task Force on Corruption. “He just renewed the commitment to fighting corruption. He has already given us the skeleton so what we need now is meat,’’ he said and added that Government should also consider speeding up corruption cases that are before the courts. And Evangelical Fellowship of Zambia (EFZ) general secretary Bishop Paul Mususu said the re-affirmation on fighting corruption was not enough because a lot of plundered national resources have not been recovered. He said that as far as EFZ was concerned, the fight against corruption is selective because some people appearing before the courts have law for alleged plunder of national resources have continued moving scot free. However, he would like to see a situation where all those implicated in corruption during Fredrick Chiluba’s tenure of office relieved of their duties until they are cleared by the courts of law. “Many Zambians had a lot of confidence in the fight against corruption in 2001. We have lost trust in the Task Force because it is not yielding the expected fruits such as recovering plundered resources,’’ he said. (The Times of Zambia, Ndola / Rts)

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