Secretary to the treasury Likolo Ndalamei says the global financial crisis will lead to lower revenue collection in Zambia this year.
Mr. Ndalamei said government is currently working on diversifying the economy from copper mining to other sectors of the economy.
The secretary to the Treasury was speaking during the opening of the second budget annual poverty review workshop in Lusaka.
And European Union Country representative Dereck Fee said budget support will remain important to government and the EU.
Meanwhile the IMF on Monday urged Zambia not to cut taxes amid pressure from copper mines to abolish controversial mining taxes introduced last year because of a need to increase spending on infrastructure development.
International Monetary Fund (IMF) resident representative in Zambia, Birgir Anarson, said the agreement between the Fund and Zambia reached in December was to increase spending in infrastructure development and to diversify the economy, while safeguarding macroeconomic stability.
“There would thus be no scope for increasing current expenditure as a proportion of total spending or for weakening the revenue effort through tax cuts,” Anarson said at a meeting with senior government officials in the capital Lusaka.
Foreign owners of copper mines in Zambia have been piling pressure on the government to scrap a 25 percent windfall tax and 15 percent profit variable tax on taxable income above 8 percent, and also to reduce the 30 percent corporate tax to 25 percent.
Revenue is projected to decline by 0.5 percentage points of GDP (gross domestic product), reflecting lower mining tax revenue but higher trade related taxes,” he said.
He added that expenditures were projected to rise by 0.6 percent of GDP, mainly because of higher domestically financed capital spending, current expenditure would be kept constant as a percentage of GDP.
Anarson said Zambia, which loosened monetary policy in 2008 to accommodate effects of the fuel and food prices shocks, “needs to stay firm enough” to keep inflation on the downward trend in the medium term.
He said Zambia should also slow reserve money growth and expand credit to the private sector to achieve lower inflation at targets of 10 percent in 2009 and 7.0 percent in 2010.
“In view of weak demand for government securities, the BoZ’s (Bank of Zambia) net claims on government may have to rise substantially necessitating significant net sales of foreign exchange by the BoZ to contain excess liquidity,” he added.
Anarson said the IMF aimed to conclude its first and second reviews of the Zambia economy under a $79.3 million poverty reduction growth facility (PRGF), a three-year IMF lending programme signed with Zambia before the end of May 2009.
Zambia is expected to adopt a single account system at the Treasury and to implement an electricity strategy, which would enable the country to carry out reforms in the energy sector, including raising power electric tariffs as part of the Fund’s lending programme, officials say.
Anarson said Zambia’s efforts to maintain economic growth at higher levels would continue to be undermined by the external environment following the global financial crisis.
He said the structural reforms in telecommunications, energy, transport and agricultural sectors would have to be enhanced to mitigate these effects.
ZNBC/REUTERS
Then we need a complete overhaul at ZRA.
Good morning Zambia, neighbours, bloggers and all out there
that is everywhere in the world, infact you should be thinking of reducing the tax rates
Really……
Rashid Morning!
Am sure they are thinking of increasing tax! oops lets wait and see!
Mwashubukenipo bonse mukwai. ZRA waht is happening?
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Hai pipo
less revenue ofcourse! mines are down and we say diversify to agric or tourism and yet Mmembe and nchito are already playing with tourism interms of transport, BWAFYA pa zed…….
SENIOR Chief Puta of the Bwile people in Chiengi district has called on Zambians to criticise leaders in a respectful way.
In an interview, chief Puta said he was not happy with the current situation in the country where leaders were being insulted and put to shame in public.
“I am saddened by the current situation in this country because if you insult the leaders we choose, we are also insulting ourselves,” he said.
IS THIS CHIEF FOR REAL? LET US ABOLISH CHIEFTAINSHIP AS THEY HAVE PROVED TO BE STUMBLING BLOCKS TO THE ADVANCEMENT OF DEMOCRACY.
I smell something about these reforms.Lets hope these energy reforms wont lead to privatization of ZESCO and ZAMTEL.What we need in our parastatals is not privatization but rather restructuring of operation and free of political interference in case of ZESCO.
Mr. Ndalamei said government is currently working on diversifying the economy from copper mining to other sectors of the economy. “how long is the gvt going to working on diversification? if you cant make farming work what other sector are you working on?
GAZZIE says MUZUHILE bLOGGERS
Brace youselves for hard times Zambians. More taxes more taxes …. more taxes
BA Evelyn King MUlishani?
Ba matworld nabailishanya sana. i hope you have seen the apology and forgiven him.
The worst is yet to come, RB & gang rushed to increase their allowances now they have to find a financier for them. You have made your bed, now lay in it!!!
Global warming is affecting everything…lol
Morning to all my zed bro and sisters
Lisa
Did you say global warming????Lol =))
Now nyama soya’s government is scrapping bursaries to Evelyn Hone students. They had not problem awarding themselves K35 million monthly salaries and allowances, today they can’t afford to pay students’ bursaries. Banyanya bakapala aba.
Ba Evelyn King!
Good morning! ZRA is affected by the global fimofimo. Most companies in Zambia have reduced their work force, as a result, less PAYE which is a major componet of the Revenue collections.
Its a sad state of affairs.
have you talked to our brother Matworld-Nice Guy? He is seeking your 4giveness. Sis pliz accept his apology.
#13
Have you forgotten that tax payers are the financiers! Come february your tax will gonna increase! >:p
#14 **==**==**==
Lisa
Global financial crisis..
youve scared me,nafwala naka vest!!!
# 16
I heard with the ice bergs melting like crazy, so is global economy dwindling coz of the flood gates in Wall street almost sinking Dow & Nasqag
Imwe that was on the lighter side kaili we must find something to blame on besides am Tonga so in Choma we say Global warming not Global financial crisis
Baby C, Matworld, Lisa, Sharp shooter naba Jenks,goodmorning. I thought the commissiner said they collected more than what they anticipated already?
Lisa
Are you in USA? :d
Zaf commander jailed
RB dozing
Blogger Chewe sleeping
Rashid Jone!
Iam all good how about you bro? How is that side?
Challenges are there to manage effectively. My only wish is that the mitigating measures to to put in place should not include, God Forbid! increase of PAYE!!!
Ba Rashid Jones! Good morning!
The Commissioner General said ZRA exceeded the collection target.
But this man Ndalamei is talking of what is expected of this year.
The article is somehow misleading. Last year’s target was exceeded by far.
# 24
yes! I thought that was the whole point of the flag? But dude am a 100% Zambian
It is a shame that Zambia has also adopted the term “Financial Crisis”!! This has just come at the right time for these fake politicians!! Look within Zed before you connect to the rest of the world. Diversifying the economy from copper mining to other sectors of the economy is something you have been talking since my Kindergarten years!! You Zambian politicians should face the truth ;
You have failed to diversify, you have failed to attract investment and thus create more and better Jobs for Zambians!!
I suggest the following;
Do your homework and stop going global.
Aba bantu batampa utuma statements twa kubendelela because the budget will be announced in days….The fact is no matter how much tax is collected in Zed, u will never get the benefits, period!..It will all end up at Southern Cross motors buying tu ma Pajero no tuma Dodge twa kwa Tetamashimba na Shikapwasha
Correct me if i am wrong!
Lisa
No its not dear! flags represents the IP Addresses. Am in Zambia but i have a british flag!How i yearn for a Zambian **==.
Are you serious?
The decline in export demand and souring copper prices will translate into low incomes among the major players in the economy.The reduction in tax revenue is expected in all the economies around the globe beccause of the triggering financial crisis.Diversification can help to minimise the adverse effects of the financial crisis but is not a complete answer to the financial crisis.
Baby C
Are you serious on that Flag thing? You are in Zed?
Sharp Shooter, Cholera iyofya kuno ku Zed.Its terrible man cause even maswiti yadula.K100 imozi imagine. kaya, filiekotuleya
# 32 I thought data packets between networks sense different locations?? Anyways!
More taxes this year
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#23 rashid
am ok man,good to know you are ok.
yes criticles(ZRA) said they met the target and even beyond for 2008,now the worry at hand is for 2009, ther in trouble due to this global fimo fimo……
Tionge, tili chebe bwino kaya imwe? I think Zambia has too many problems. When they try to solve this one,the other one pops up. lets wait and see where Zambia is heading to.
These guys from ZRA steal alot.
Ok people!
Am hitting the sack…after 3am….see y’all later
Keep blogging^:)^
Rashid Jones ka flag kaili
Ako ka flag sikaoneka monga ka pa Zed.Kaoneka monga ka Pa Promised Land ka!
Flag thing, most of us are in zed. Just seen the 5 MiGs fly over parliament and saw the grand entry with my own two eyes. Logic says up PAYE. But fortunately for me, I know I’ll be paying the same 35% because elections are just around the corner. I need to be “appeased” in someone’s understanding.
…how can they not, when they are busy doing nothing about all the illegal activities and businesses that are mushrooming right in front of their noses. Beside whats the purpose when they themselves cant even put the money to good use so as to benefit Zambian and Zambians as a whole. [-(
Sharp Shooter, tili pa Zed bize investing.ka frag,Baby C has already said ati Ip fimo fimo.We are suffering with your follew Zambians kaili imwe mutaba chalo chanu.
The effects of high taxation hasn’t tricled down to the masses. We still experience one of the highest tax regimes yet the availability of essential commodities and service deliveries in public institutions like the hospitals are nothing to write home about. The health facilities are pathetic. Medicines are no where to be seen. We still experience high costs in fuel. Our taxes are simply high in terms of Import tax; customs and excise and import VAT. We pay through the nose even as consumers. What more do you want? Let us see things move. Otherwise I am gone to Gaza to see Livni
Rashid jones, sikutaba awe,tigalavanta naise kuno.Mtima na nzelu zili ku Zed. Vikabalansa vintu, fast nikubwela. No place like home.
# 47 I totally agree with you
Zoona vi ZRA pama border viyiba maningi ndalama. Zonse ndalama ziyenda ku bakawala bame bavala ma uniform ya boma.
Stop blaming yourselves about the credit crunch.It is an evil plan.
The ultimate aims of these evil planners is to:
A.Destroy all small business through over-taxation or rates.
B.Merge all big business until aproxmately six companies control the needs of each contry.This called centralisation.
C.These large conglomeates controlled by groups,sometimes called the multinationals,will exert enormous economical influence in each contry.
D.This will affect employment oppotunites(or lack of them)for the middle class people,along with new taxation rate.
E.Thus the Government of each contry is phased out until they becomes virtually irrelevant.
We are collecting more taxes here in Zimbambwe. We now have a $50B note.
In an economic down turn, it makes sense to lower taxes. Lower taxes encourage a bit more spending and might lead to increased revenue. The alternative of higher taxes will lead to business shutting down and people losing jobs. Obviously, the govt. thinks by higher taxes you collet more, but there will less businesses (PAYE) to collect from so revenue will still reduce!
Afternoon,Sharp Shooter, Matworld and Tionge, Ive just come back from the funeral and this is when I’m having my lunch. Iye Matworld, forget about yesterday’s comments, you explained ala ndimunthu fye. Cheer up. Akabwali ka tufinkubala ala nakawama. Good day guys.
Increase taxes when the economy is doing fine (what Magande did) to create a buffer when the economy is not doing so well, so you can reduce taxes (what Situmebko should do) to stimulate growth! What business schools did these politicans attend?!
The poor few who work in zambia face the music of this high taxes, but most of the people in small businesses believe me dont pay anything, including the same leaders we have in Zambia. sure a miner getting 1.2 m pays more tax than a minister getting 30m a month. ZRA, they are all thieves, they are interested just to get a lot of money when you bring in a vehicle, packs of goods for your family at the airport and miners taxed heavy. 3/4 of the people who are busy selling things dont even pay a ngwee. council workers charge people for parking and selling at markets, but they dont offer you tickets, so no record and that ends up in the pockets, so revenue for zed is nil.,hence high tax.
#53, Mwatukumbwishako akabwali ne ifinkubala.. ululenda na upona ifwe ka..
Sorry about the funeral..
ATI MALILO NKULILANA
Ba Rashid Jones Muli shani?
#54, Thanx. Sorry about ululenda. I’ll keep some for you, remind me when you come to ZED.
Highest taxes are paid in zambia; personal effects.Importing vehicle 40% value goes to ZRA and cash goes to cabinet perks at the expense of development.they increased their salaries before performing,free facilities,unecessary workshops when 80% struggle to have a meal> christian nation>
#57, I was in Zedi early November, left early Dec. Had some ifinkubala but mwanjibukisha nafuti apapene. Nalilya sana pamo na inswa. Will catch up with you . Only God knows when. Iam a mother of three bane… =d>=d>=d>
WHERE IS THE $4 BILIION COLLECTED FROM THE MINES? WE WANT TO KNOW TWACHULA SANA PA ZED.
…ati Government is working on diversifying the economy… sha!! How long will we hear the same story with no action.. Just blanket statements which mean nothing!!
This is stuff that they saw approaching.. or at least should have seen. The formula for Zed is simple.. Agric! Food prices will be high and food will be scarce. Forget about tourism.. tourists will be hanging onto their money and would rather tour nearby places where they can limit their expenditure.