Parliament last night rejected a motion requesting government to reinstate the fuel and maize subsidies.
The motion moved by MMD Solwezi Central MP Lucky Mulusa was urging government to reinstate the fuel and maize subsidies in view of the hardships that Zambians were facing as a result of the removal of subsidies.
Mr. Mulusa’s motion was seconded by Kabompo West MP Ambrose Lufuma who argued that the subsidies were a necessary fixture especially in fractured economies such as Zambia’s.
When it came to voting, 52 MP’s voted in favor while 70 were against the motion.
In moving the motion, Mr. Mulusa said there are 31 possible sources of savings that government could have considered without removing the subsidies.
He said government needs to consider increasing tax contributions to GDP adding that Zambia has the capacity to collect K40 billion or twice the projected tax collections in the 2013 by utilizing efficient tax collection systems.
Mr. Mulusa said, “ If you consider the fact that Norway captures taxes worth 60 per cent to its GDP, then the argument is that Zambia at 19.4 per cent tax collection to GDP, still has potential right up to the world’s best benchmark of 60 per cent. “
“This means that Zambia can potentially raise an additional K50 billion. This is no exaggeration especially that when we properly account for our GDP, THE GDP figure will self-correct and increase proportionately. “
Mr. Mulusa who catalogued 31 sources of losses of income and wasteful expenditure said Zambia has enough resources to maintain subsidies on fuel and maize.
He said, “In justifying the removal of subsidies, the government observed that the fuel subsidy was not benefitting the rural areas but the urban, Mr Speaker, we must be careful here. There is no analysis done to show that indeed, the rural poor do not in any way lead their lives in a manner that has no link to any activity, service or product which has fuel input in their production processes.”
He added that the argument is also silent on the fact that there exist poor people within urban areas, meaning that Zambia, with real unemployment rate of around 90 per cent may just have 90 per cent of its combined rural and urban population living in abject poverty.
“Remember that poverty is largely caused by unemployment,” he said.
“The so called urban rich actually support their poor rural relatives through social transfers. Withdrawing any support from them may actually affect their ability to assist their poor rural relatives, Mr Mulusa said”
MMD MP’s Situmbeko Musokotwane, Victoria Kalima and Garry Nkombo of UPND debated in favour of the motion while Nkana PF MP vehemently debated against reinstating the subsidies.