Reduce PAYE before introducing health levy – Haabazoka

Economist Dr Lubinda Haabazoka says government must reduce Pay As You Earn by seven per cent before introducing a national health levy.

In a statement shared on his Facebook page, Sunday, Dr Haabazoka observed that whilst the national Health Insurance Bill was a good way of financing the health system, it was worrisome that overtaxed citizens had to fund it.

“The National Health Insurance bill is a good way of financing the health system in Zambia. What is worrying is that it is going to create another body larger than even NAPSA. This body will have its own costs unfortunately to be funded by the same over taxed employees and employers!!! We have only about 800,000 formally working employees with a population of around 16 million people. Yet again, 800,000 people have been called upon to fund health care services for 15.2 million people!!!! We should also take into mind that only about 500,000 are paying PAYE with some paying as high as 37.5%. Apart from PAYE, these people pay NAPSA which is a social security tax! Government won’t buy into that because they don’t want to share their income! So why should I yet again share?” Lubinda asked.

“Why can’t the new body get a percentage of PAYE? It’s is cruel to ask more from employees and employers who are currently paying for the employee part of NAPSA, Training skill levy or whatever they are calling it and also meeting its own Income TAX. The same employee is also bearing the costs for 10% withholding rental taxes which mind you has already been taxed in form of housing allowance by ZRA. What else should we pay for?”

He proposed that government reduces PAYE.

“Zambia’s health care system is a total mess and citizens are only surviving through private medical care!!! In order to access private medical care, employees and employers are already bearing costs. The National health bill will force us to pay even for public health care that some of us do not want to access. It is not a secret that preference will be given to public hospitals by the new bill. What will happen to insurance companies? Why not let the current system prevail? Or reduce PAYE by 7% then introduce your national health levy or whatever it will be called? What we are scared of is that in a few years, 100% of our income will go towards new taxes and fees!!!! Please listen to your own people. The idea is good but we do not want to fund another NAPSA. Leave it to us to choose how we shall access health insurance and care,” stated Dr Haabazoka.

         

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