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Alba Iulia
Sunday, January 19, 2020

Zambia Airways is another case of Sales Tax

Economy Zambia Airways is another case of Sales Tax

By Bright Chizonde Researcher-CTPD

The Center for Trade Policy and Development (CTPD) is greatly concerned with the poor management of the decision to relaunch Zambia Airways.

The limited consultation, poor planning, lack of transparency, inclusiveness, and limited engagement with the public parallels the decision to introduce a sales tax. Just like the decision to replace VAT with Sales Tax, the relaunch of Zambia Airways has been postponed many times on account of poor projections and planning-all in the midst of an adamancy to implement the decision regardless of the views of critical stakeholders.

The government claims to have a comprehensive business model and financial projects, but these have not been presented to key stakeholders or the general public, the same way as the much talked about sales tax simulations which were never made public.

Considering the government’s fiscal position and Zambia’s current economic situation, CTPD will continue to advise the government to halt its decision to relaunch Zambia Airways and focus on improving its plans through background work and stakeholder consultation, until such a time as would be economically and fiscally allowing for the relaunch. This recommendation was arrived at after detailed assessments of the economic environment, fiscal position, and case studies of South African Airways, Ethiopian Airlines and Malawian Airline, the latter being a classic case of an Ethiopian partnership which has failed to generate profits.

It has also been established that the Ministry of Transport and Communication, and IDC are not in agreement concerning the appropriate business model.

CTPD is also concerned that even at this stage, the financing options for Zambia Airways continue to be elusive. Considering the recent default on only US$1.4 million towards servicing the African Development Bank (ADB) loans and drag in sourcing funds for electricity importation from South Africa, Zambians should indeed be wondering how government seeks to finance the lease of plans and operations of Zambia Airways.

It is surprising that government has continued to push for the relaunch of Zambia Airways through establishing a board of directors and recruiting employees who are already drawing salaries, when the general public does not know the source of these funds.

If Zambia Airways is to succeed, government should become more accommodating of divergent views for the betterment and refinement of their plans.

We therefore urge the government to make public the business plan, the lease agreement, the management agreement, and MOUs signed with Ethiopian Airlines and others because they are a number of local aviation experts who are well able to advise government on these critical areas.

CTPD also advises IDC and the Ministry of Transport and Communication to stop ignoring public concerns regarding the decision to relaunch Zambia.

[Read 2,418 times, 1 reads today]

11 COMMENTS

  1. Zambia Airways is not a priority, We need basics such as food, jobs and energy. Not convinced that this Zambia Airways will generate jobs. Wake up Lungu and PF and smell the coffee

  2. Some people will never appreciate. It’s only under pf that we have managed to revive our national airline. Look how beautiful those women in the picture look. Kz

    • Since you only as PF are disputing the glaring negative indicators, with inflation, exchange rate, mealie meal prices breaking Zambias records since 1964, how do you now explain the phenomenon where it has started raining but the Kariba dam is going centimeters down instead of centimeters up, how do you explain the phenomenon where even nature is against you.

    • Oh my. You truly are inept if the beauty of the women is what you thought is the most significant contribution you could make on this topic. Good ridance you no longer serve as an advisor to the President….one can only imagine the damage you already caused with your poor judgement.
      Other governments before PF did not revive Zambia airways purely because they understood it was not a priority and would infact be a liability and drain on limited public funds. PF goverment in their own wisdom (or lack of it) think they know better than all the previous goverments and all the other national airlines world over that a struggling. This is despite track-record, economies of scale and existing lucrative routes. It does not take a genius to predict that Zambia Airways is a failed project even…

  3. The reason the PF Govt isn’t transparent in all its deals is because of the hidden costs that go to kickbacks and kata mulomo for the players involved. You’ll be shocked when you look at the financials so spare yourself the BP. The Board and employees are all well-connected cadres, we’ll see when the project fails to takeoff

  4. Other governments before PF did not revive Zambia airways purely because they understood it was not a priority and would infact be a liability and drain on limited public funds. PF goverment in their own wisdom (or lack of it) think they know better than all the previous goverments and all the other national airlines world over that a struggling. This is despite track-record, economies of scale and existing lucrative routes. It does not take a genius to predict that Zambia Airways is a failed project even before it takes off.

  5. If the PF government was really serious about revamping the airline industry in Zambia it would have invested in already established local companies such as Mahogany by buying shares through IDC instead of bringing in a foreign company in the form of Ethiopian Airways that will compete with our own Zambians. Building capacity of local companies will have made them able to expand to regional routes and eventually international ones. In this way, the running of the government’s investment would have been left to competent and experienced people without political connections….but as usual, PF being what it is, chose the most expensive, risky and wasteful route just so that someone somewhere got something from this thing…..

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