Zambia Union of Financial Institutions and Allied Workers (ZUFIAW) president Ackim Mweemba has asked Minister of Finance Felix Mutati to cut Pay As You Earn (PAYE) by 2.5 per cent.

In a statement issued today, Mweemba said reduced Pay as You Earn would give relief to the already stressed workers.

“As the minister prepares to present the 2018 budget on 29th September 2017, ZUFIAW is calling for among other things the reduction in Pay as You Earn (PAYE) to give relief to the already burdened workers in form of the said tax, other taxes and interest rates on loans. We caution the minister that the danger of having high taxes might lead to Zambia failing to achieve the 2030 transformative sustainable development goals which are aimed at ending the tyranny of poverty in society. Henceforth, we propose the reduction of Pay as You Earn from the current 37.5 per cent to 35 per cent and giving other reliefs to the workers to increase their disposable income,” Mweemba said.

“Workers deserve lower Pay as You Earn (PAYE) and other tax reliefs especially that the government is now getting substantial amount of money from toll gates and we should bring on board the untapped informal sector for it can immensely contribute revenue to the national treasury.”

Mweemba however urged government to consider imposing serious taxes on charcoal and firewood.

“On the other hand, we are painfully calling for the imposition of tax on charcoal and firewood to prevent the excessive cutting down of trees, following the recent hike in electricity tariffs to cost reflective levels. Well, we are alive to the fact that charcoal and firewood are a big source of energy for cooking especially for the poor, we are tempted for once to follow the capitalist mentality because this act is the major contributor to deforestation and environmental degradation a vice which will in the long run affect the rainfall pattern thereby seriously affecting our hydro system which is the major source of our energy.” He observed.

“This taxation shall be a measure to control the level at which tree cutting is being done in the country and force the country to look for other cheaper and more environmentally friendly sources of energy. The indiscriminate cutting down of trees for charcoal or firewood for cooking contributes to global warming and deforestation as this country do not have a deliberate policy for re-forestation. The country needs to turn to cheaper and more environmentally friendly sources of energy such as briquettes, which burn longer and are much cheaper than charcoal. Briquettes are cheaper given that the raw materials are agricultural waste that have no commercial value and when not used, are just biodegradable artifacts.”

And Mweemba urged government to consider removing duty on importation of all machinery.

“Additionally, we urge the minister to consider charging Zero percent duty on all machinery needed for making alternative environmentally friendly sources of energy both domestic and industrial use. Furthermore, we demand that the minister, through the Bank of Zambia authority, seriously consider the downward revision of the country’s policy rate. This is to enable the general populous especially the workers of the country get a relief from the financial institutions in terms of interest rates. For instance, as at July 2017 South Africa’s monetary policy rate was at 6.75 per cent, Botswana was at 5.5 per cent and Namibia was at 6.75 per cent. This has led to positive gains economically and has led to the creation of jobs especially for young people in respective countries. Interest on borrowing in this country is still very high and has largely discouraged borrowing,” said Mweemba.

“As for the workers, the high interest rates have burdened them, leading to the high number of them defaulting on their loans thereby affecting the performance of the financial institutions. Therefore, the 11 per cent monetary policy rate by Bank of Zambia can still be reduced even further to encourage people to borrow and get capital for their businesses. The lower the interest rate, the more willing people are to borrow money to make big purchases and investments. When consumers pay less on interest, this gives them more money to spend on their personal development, which can create a ripple effect of increased spending throughout the economy. Businesses and individuals also benefit from lower interest rates, as it encourages them to make large equipment purchases due to the low cost of borrowing. This creates a situation where output and productivity increase in the country.”