CTPD questions PF’s appetite for tax

The Centre for Trade Policy and development (CTPD) has asked government to work on fixing the already existing “broken” social schemes before introducing new ones like the proposed National Health Insurance bill.

In a statement issued yesterday, CTPD executive director Isaac Mwaipopo suggested that instead of introducing one tax after another, government must focus on countering the challenges people had been facing due to reduced incomes and higher prices of goods and services.

Mwaipopo also observed that the failure by subsequent governments to put money collected through various taxes to good use, was one of the leading demotivating factors to payment of tax in Zambia.

Mwaipopo admitted that taxes were necessary for economic functions but warned that equity needed to be observed.

“The country has a number of already existing social schemes that have lamentably failed to meet the expectations of Zambians due to poor and non-transparent management systems. We expected that government would first prioritise working on fixing these schemes by adequately addressing the many challenges they face so that they labour towards people’s expectations before moving on to introduce another scheme. Currently, the National Pension Scheme Authority (NAPSA) which was established in the year 2000, serves as one example of a scheme that has not lived to expectations as a number of people subscribed to still struggle to access benefits,” Mwaipopo said.

“There is need for the government to realize that the citizens generally do not have challenges complying and supporting good initiatives, the biggest problem that citizens have with the current system has been its failure to deliver services to the expectations of the people and the failure to promote and defend public interest, especially in the utilisation of public resources. The recent Auditor General’s report brought out shocking revelations on abuse of public funds. The expectations from citizens was that government was going to act in the best interest of the public, but to the shock of everyone, the report has been taken like a mere academic thesis drafted for merely passing annual exams. It is this attitude that has led to many citizens having less confidence in government’s ability to deliver on its promises.”

Mwaipopo insisted that government must rethink its decision to introduce a health insurance scheme, arguing that citizens were already paying various forms of taxes to which they could hardly see proper use.

“While we understand that most people find it expensive to take care of their health bills using ‘Out- of the Pocket’ money due to the high poverty levels, we think it’s more prudent to guard against systems and individuals that embezzled resources that are meant to advance the common good of society. As government works tirelessly to introduce the proposed health insurance scheme, it is also important to note that citizens are already paying various forms of taxes to which they can hardly see proper use. Examples include; the fees collected through toll gates, many motorists have continued to wonder where funds meant for the maintenance and construction of roads goes. Can government explain to the public where the money collected from toll gates is going and who is benefiting from this money? Wasn’t it meant for the maintenance of roads? If that’s the case why can’t people see their money being put to good use?” Mwaipopo asked.

Meanwhile, Mwaipopo charged that the failure by subsequent governments to put money collected through various taxes to good use, was one of the leading demotivating factors to payment of tax amongst Zambian taxpayers.

“The Zambia Revenue Authority (ZRA) has continued to complain about low levels of compliance on tax payments. However, one of the leading contributing demotivating factors to paying tax in Zambia has been failure by subsequent governments to put to good use money collected through various taxes. We know that one easy target advantage of a tax- based system is that it is easier to mobilize funds from everyone, especially people in the formal sector. But we should not lose sight on how the tax burden has increased rapidly over the past few years in this country,” said Mwaipopo.

“A worker earning just above K3, 300 will have 25 per cent of his or her monthly income deducted and remitted to the Zambia Revenue Authority as tax obligation. This is besides the need to pay other forms of taxes such as TV Levy, paid at K5 every month and electricity tariffs which have gone up by over 50 per cent since 2017, withholding taxes on rent at 10 per cent and Value added tax in general at 16 per cent. In addition, as noted, workers are required to pay 5 per cent of their salaries as a pension contribution with no guarantee that they would even access this fund in their life time.”

         

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