ECONOMIST Noel Nkhoma says the PF’s proposal to remove road tax in their 2021 to 2026 manifesto does not make economic sense.

During the latest PF manifesto, President Edgar Lungu said if re-elected, he would remove road tax.

But in an interview, Nkhoma wondered why the PF government wanted to remove other channels of revenue generation when the country was under economic distress.

“In the state of the economy that we currently have, we are operating a very high budget deficit, which is in double digits. Then we have a huge debt, which is in excess of 115 percent of GDP, if you take the domestic debt as well as the external debt. Then thirdly, the GDP itself has contracted, which basically means that the economic activities in the country have contracted. Now, if the common economic activities have contracted by I think if my figures are correct, I think our GDP is below 20 billion now per annum. Now, with all these structural imbalances, it tells you that the economy is under distress,” he said.

“Now, with a contracted GDP which basically means that the economy is not able to generate sufficient revenue for government to collect taxes. Now, when your tax base is narrowing, how do you forgo other viable revenue streams? The question is that has anybody complained about road tax? Have the citizens petitioned the government to abolish road tax? The answer is no! Now what problem are you trying to fix?”

He added that the abolishment of road tax would not benefit many Zambians, as the population of those owning vehicles in the country was minimal.

“If you are saying that you want the majority of the citizens to benefit, how many people own vehicles to the percentage of Zambians? We are sitting at a population of 17 or 18 billion, how many vehicles do we have in Zambia? I think it is well over two million if I am not mistaken. Now, how does government justify that as a benefit or whether it is a stimulus or financial burden being removed from the Zambians? The answer is no! One, it does not make economical sense and it does not benefit the majority of the Zambians, in the sense that the three million or so who own vehicles, are they going to pass on that benefit by saying ‘fine we will not be paying road tax, then we as operators we are going to pass it’,” Nkhoma said.

“The question is, you have built so much roads, which the quality is compromised to some extent, which will require high maintenance, why do you want to take away revenue and forgo revenue to be able to appease the citizens by way of saying ‘we are now trying to address the issues’, it doesn’t make sense! So that is my response to that.”