FUEL TO HIT 34 KWACHA PER LITRE BEFORE END OF YEAR UNLESS…
1. THE TAX HOLIDAY ON FUEL IS ENDING IN JUNE
A lot of people are not aware that the only reason why fuel prices have not yet hit the K30 mark per litre is because the UPND Government has maintained the tax waiver that ECL introduced last year; ECL removed both Excise Duty and VAT on all oil products in order to maintain low fuel prices.
This tax waiver is coming to an end on 31st June, 2022. With the pressure for money and with the pressure to please the IMF for the pending 1.6 billion dollar Kaloba, it is most likely that President Sammy will have no choice but to scrap off the waiver. Once VAT and Excise duty are re-introduced, the fuel prices will immediately shoot up to at-least K30 per litre.
2. JOBS AND BUSINESSES
Fuel is the blood that runs the economy. Without fuel the economy collapse. High cost of fuel means high cost of production; this will lead to low production and productivity, reduced forex, high cost of living, loss of jobs and a worsening unemployment situation leading to mass poverty.
3. DOES ZAMBIA HAVE THE MONEY TO SUBSIDISE FUEL?
Let me clear a few things before we even go far:
a) President Sata, removed fuel subsidies on fuel in 2013, there are no fuel subsidies that President Sammy removed on fuel, that was simply a punka story.
b) Fuel subsidies are not for consumption but production because fuel is the key factor of production.
There is no economy, small or big that doesn’t subsidise certain strategic economic tools or economic sectors. Subsidies can be used to cushion the burden on the poor or to reduce the cost of production as well as the cost of doing business with the aim of increasing productivity in order to create jobs, reduce poverty and grow the economy.
The question is do we have the money to subsidise fuel?
The answer is YES;
President Sammy has given mines, tax holidays at a time the copper prices are at their historical highest.
If President Sammy scraps off the tax holidays he has given his corporate mining friends, we will be able to raise about 1.2 billion dollars per annum from the mines. This is the money we need right now to pay for subsidies and inject in the economy to increase productivity, create jobs, increase forex and grow the economy.
So let President Sammy scrap off the tax holidays he has given his mining friends and re-introduce fuel subsidies in order to save and grow the economy.
People are stressed, kuli ma pressure muma komboni; there is no money in this economy, it is dry and the cost of living is going higher and higher.
Ba President save the economy before it’s too late, scrap off the tax holidays you have given the mines and use that money to pay for subsidies on fuel and grow the economy.
Antonio M. Mwanza
01/04/22