Saviour Chishimba
THE CASE FOR NO PAYE AND LEVIES
A national budget is the budget of a country: The government gets money from taxes and fees, and spends it on things like national defense, infrastructure, grants for research, education, and the arts, and social programs such as Social Security and Medicare. It’s a statement on how government intends to collect money from citizens and corporate persons. More than 75% of direct taxes are paid by workers as PAYE.
Take note that tax is not new money, it’s recycled money. More borrowing to supplement tax revenue means the same tax payers must repay the loans through other taxes under the double taxation scheme. What’s the saga of double taxation?
- A worker pays PAYE
- A worker is the ultimate payer of taxes of fuel when he either gets on a bus or drives his own car.
- A worker is the ultimate payer of tax on goods in stores. Tax is a cost to business and it’s passed on to customers.
- Zambians who are not in employment equally pay taxes when they buy anything.
Here are the questions we need to ask:
- How much revenue will come from the mining sector: gold, emeralds, copper, the 10% of gold in copper, etc.?
- How much revenue will come Mukula and other resources?
Under the UPP-led Government, PAYE will be phased out as follows:
Year 1: 25%
Year 2: 15%
Year 3: 5%
Year 4: 0%
After phasing out PAYE and sales tax, a progressive corporate profit-based tax regime will take full course. The state will collect tax on profits among corporations and the rate will be on a sector by sector basis. ZCCM-IH will take over all the mining companies. The state will own 51% of shares and the remainder will be floated on the Lusaka Stock Exchange for Zambians to buy.
The current policy of multiple and high taxes is the main reason why the government’s tax revenues remains unsustainable. Instead of tax cuts, successive governments keep going in the opposite direction that puts the treasury under more financial stress.
It’s the hostile tax regime and the high domestic and foreign debts that are responsible for cash (liquidity) problems of local companies, most of which have folded and many jobs have been lost.
With a visionary and corruption free government, Zambians need not pay PAYE. Under the UPP, Zambia will join over 15 countries in the world that do not collect PAYE from workers. This way, Zambians will have more disposable income for increased consumption and economic growth.
The UPP’s county system of government administration will not only eliminate corruption, but will also bring in efficiency, innovation and creativity in service provision by counties (district local governments).
Saviour Chishimba
UPP LEADER