TAXES

Government has increased the Pay As You Earn, PAYE, exempt threshold from K600, 000.00 to K700, 000.00 and provided further relief to workers through adjusted income tax bands.

Finance and National Planning Minister, Situmbeko Musokotwane, said working earning K700, 000.00 monthly income would be exempted from PAYE while those earning K700, 000.00 and K1, 335, 000.00 would contribute 25 per cent of the earning as PAYE.

He further explained that those earning between K1, 335,001 to K4, 100, 000.00 would pay 30 per cent while those above the K4, 100, 000.00 would pay 35 per cent.

Dr Musokotwane said government’s intention to provide further relief to workers was constrained by the prevailing economic environment.

Government has also in the budget proposed an increase in the tax credit for disabled persons from K600,000.00 to K900, 000.00 per year while the exempt portion for terminal benefits has also been increased from K20 million to K25 million.

Dr. Musokotwane said government has also proposed to increase the allowable pension contribution from K135, 000.00 to K155, 000.00 per month.

He also said government has proposed that income equivalent to the annual exempt income under PAYE be exempt from taxation and that the balance be taxed at a rate of 25 per cent.

AGRICULTURAL SECTOR

Government has allocated the agricultural sector, over One trillion Kwacha in this year’s national budget, representing a 37 per cent increase from last year’s K800 billion.

Finance and National Planning Minister, Situmbeko Musokotwane, said the budgetary provision is meant to help promote growth in the sector.

Dr. Musokotwane said government’s focus is to develop the sector in its efforts of diversifying the economy following the poor performance of the mining sector in view of the decline in Copper prices on the international market last year.

He noted a decline in agriculture sector performance with crop production declining to 7 per cent thereby contributing to the contraction of the sector by 4 per cent.

He attributed the poor performance in agriculture to high cost of inputs, poor livestock management and weaknesses in the Fertilizer Support Programme.

He said that limited access to credit, inputs and extension facilities by farmers coupled with the failure to attract adequate private investment in sector negatively impacted on the performance of the overall agriculture sector.

In an effort to revamp growth in the agriculture sector, government has allocated K435 billion towards Fertilizer Support Programme, a measure meant to enhance farmers’ access to inputs in efforts of securing national food security.

Dr. Musokotwane said government expects the number of beneficiaries for the Fertilizer Support Programme to increase once the measure is implemented during the course of this year.

He indicated government’s concern over the limited impact that the programme has had on increasing agricultural productivity.

He added that in view of the concern, government has initiated a comprehensive review of the programme to improve its effectiveness especially in rural areas.

Dr. Musokotwane said K25.4 billion for the procurement of motorbikes and bicycles and an addition K12.3 billion for the construction and rehabilitation of camp houses for extension workers

He further said K70.7 billion is for livestock farming development, the resources which will also be used to create at least One disease-free livestock zone.

He said government is determined to learn from some neighboring countries that have succeeded in the development of vibrant livestock sector.

He also said K42.4 billion has been allocated towards the development of the Nansanga Farm Block in Serenje, which is expected to be a model of agriculture development in Zambia.

He added that K56.5 billion has been allocated for various irrigation projects, the allocation has been made to reduce small-scale farmers dependence on rain-fed agriculture in view of the unpredictable weather patterns

Government has also allocated K100 billion to the Food Reserve Agency, [FRA], for strategic food reserves and an additional K10 billion for the Food Security Pack as part of the measures to mitigate the high cost of food and ensure household food security.

It has also waved tax on imported Two wheel tractors and accessories, tractors up 60 Horse power, ploughs, harrows, disc harrows, planters, seeders, rippers, Sub-Soilers, cultivators and Pump sets. Others are Treadle pumps, hip pumps,Knapb Sack Sprayers and Suction, Delivery and Falt hoses.

The measure, which is meant to promote growth in agriculture, will cost government an estimated K38.9 billion.

HEALTH SECTOR

Government has allocated about K1.8 trillion to the health sector.

The allocation of K1, 823.4 billion, represents 1.4 percent increase from last year’s allocation of K1, 586.6 billion.

Of the allocation, about K208.6 billion had been allocated towards the procurement of essential drugs and medical supplies.

Dr. Situmbeko Musokotwane has allocated K168.1 billion towards the improvement of infrastructure.

Some of the hospitals to be worked on include samfya, Chadza , Mumbwa, Kapiri Mposhi, Isoka, Shangombo Chongwe , Kaputa and Lumfwanyama .

The Minister said about 1970 health personnel would be recruited at a cost of K25.0 billion while K33.2 billion would be spent on procuring media equipment.

About K170 .7 billion has been channeled for the prevention and treatment of HIV/AIDS , K94.9 for the control and management of malaria and K9.6 billion in the fight against tuberculosis.

TOURISM SECTOR

Government has allocated K77.6 billion to the tourism sector in the 2009 National Budget.

Dr. Situmbeko Musokotwane said government hopes the budgetary allocation would help improve performance in the tourism sector.

Dr. Musokotwane said government has allocated K24 billion towards the rehabilitation of the road from Mbala to Kasaba Bay in an effort to improve access to the Northern Tourism Circuit.

Dr. Musokotwane said K11 billion has been allocated towards the construction of a terminal building at Mbala Airport and rehabilitation of the Kasaba Bay airstrip, while another K10 billion has been allocated towards the preparation of an integrated development plan for the Kasaba Bay tourist area.

He said a further K14.7 billion has been allocated towards the electrification of Kasaba Bay.

He said government hopes to attract more than 12 world class hotels to the area, once the planned infrastructural developments are completed.

Dr. Musokotwane said this when he announced the 2009 national budget under a theme ‘Enhancing growth through competitiveness and diversification.’

The minister said K99 billion has been allocated for rehabilitation of the Zimba/Livingstone Road, which when completed would improve access to the tourist capital.

He said K7.5 billion has been allocated towards the proposed development of a new tourism zone in Livingstone that will have necessary infrastructures for investors to readily establish tourism facilities.

Dr Musokotwane said K59.1 billion has been allocated towards rehabilitation of roads in key national parks of which amount, K36.6 billion will be used for the Chipata-Mfuwe road and K24 billion will be used for the Kafue National Park spinal road.

He said in an effort to promote the marketing of the country and a measure of tourism promotion, government proposes to refund certain expenses incurred in shooting movies.

He said government has proposed a 15 per cent rebate of expenses to filmmakers incurred in shooting movies locally

EDUCATION SECTOR

Government has increased the budgetary allocation to 24 per cent towards education and skills development from K2.1 trillion to K2.6 trillion this year.

The increase in the budgetary allocation is in line with government policy of investing in human capital development in an effort to enhance productivity and contribute to the attainment of a vibrant economy.

Dr. Musokotwane said government will use the resources towards improvement of access to education at all levels.

He said K45 billion has been allocated towards the recruitment of 5, 000 teachers this year in government efforts of improving the teacher pupil ratio and the quality of education in the country.

He said K577.9 billion towards infrastructural development in education sector compared to K368.7 billion last year.

He said K423.3 billion of the total amount will be channeled towards the construction odf basic and high schools, providing an additional 2, 500 classrooms.

He also indicated that K42.8 billion has been allocated in this year’s national budget for educational materials that include books and desks.

Dr Musokotwane said K207.9 billion has been allocated to the three public universities, of which K35 billion has be allocated towards infrastructure development.

He said K5 billion has been allocated towards the transformation of Copperbelt Secondary Teacher Training College and Kwame Nkrumah Teacher Training College into a university and an additional K5 billion for the conversion the dilapidated Mulakupikwa Police Training College in Chinsali district into a teacher training college specialising in sciences.

ENERGY SECTOR

And government has allocated K16.8 billion   to ZESCO for the completion   of the rehabilitation works.

Government has further allocated K88.8 billion to the rural electrification so as to expand the national grid and improve access to power in rural areas.

ZANIS/ENDS/SJK/MKM/ENDS

The government has removed windfall tax in order to salvage the mining sector from collapse. However, the government has retained the variable profit tax , which will still capture any windfall gains that may arise in the sector.

Zambia’s mining sector which has seen some companies winding up has been badly affected due to the falling prices of copper and other commodities on the international market.

The global effects on the sector led to government collecting revenue of K319.5 billion last year, representing a 65 percent drop from the targeted K917.3 billion by the end of December 2008.

Finance and national planning minister Dr. Situmbeko Musokotwane said government has also allowed hedging income to be a part of the mining income for tax purposes and increased capital allowance to 100 percent as an investment incentive.

Dr. Musokotwane said’ that measures have been taken after consultations with the industry and other stakeholders and are in line with the impact of the global crisis on the sector.

He said the concession through which government will register a revenue loss of K19.3billion will come into effect from April 1, 2009.

Government has however maintained corperate tax at 30 percent, mineral royalty rate on base metals at 3 percent of gross value, withholding tax on interest , royalties management fees at 15 percent .

Government last year introduced a tax of 25 percent at the copper price of $US 2.50 per pound , 50 percent at price for the next 50 cents and increase in price and $US 75 percent for above $US 3.50 per pound.

These measures were intended to ensure that the nation received a fair return from its resources, while maintaining a globally competitive mining industry.

However the sector despite the challenges recorded a 4.9 percent growth as compared to 3.6 percent recorded for 2007.

Preliminary estimates indicate that copper production increased by 3.7 percent to 569,891 metric tones while Cobalt production increased by 19.5 percent from 4,414 metric tones in 2007 to 5,275 metric tones.

The Minister has further proposed to reduce customs duty on Heavy Oil from 30 to 15 percent and to remove customs duty on copper powder, copper flakes and copper blisters.

He has also proposed to include copper and cobalt concentrates on the import deferment scheme for Value Added Tax (VAT) purposes.

He stated that the measure will reduce the operating costs of mining companies as well as encourage the utilization of local smelting capacity.

ENDS/MKM/PKZANIS

Kawambwa Tea Company (KTC) owes some Zambian companies and parastatals over K4.219 billion.

District Commissioner, Wilbroad Mumba confirmed the KTC’s huge debts in an interview with ZANIS in Kawambwa.

He said K580 million is for income tax, with National Pensions Authority owed K240 million, while retirees are yet to be paid K660 million by the tea company.

KTC also owes workers compensation board K75 million and bank over drafts of over K660 million.

Others firms owed by KTC are Zesco, K104 million, ZANACO bank K1.9 billion loan, salary arrears for workers in Kawambwa and Ndola K600 million.

Mr. Mumba wondered why management was failing to pay bills, wages and salaries for casual and permanent workers respectively when it was making a lot of profit.

He also lamented management’s failure to provide protective clothing for its workers.

Mr. Mumba observed that there were a lot of Tuberculosis (TB) cases at the factory due to lack of protective clothings.

However, he expressed happiness to note that management has started to do something for the workers plight.

ZANIS/ENDS/LC/EB

Workers at Kawambwa Tea Company (KTC) are appealing to government to repossess the company in order to ease their sufferings.

The workers have alleged that the current investor has failed to run the company.

Speaking to ZANIS in Kawambwa, the workers’ representative, Peter Mutale, said government should urgently take over the company, accusing the investor of having failed them.

Mr Mutale, who was flanked by casual and permanent workers, charged that there was urgent need for the government to come in.

He said it was clear that the current investor has failed to run the company which he said is profitable because nothing has changed in terms of looking into workers plight.

He suggested that the government should get some shares if it fails to take over the entire company.

And Mr Mutale said there is need for management to consider increasing workers’ wages and salaries in order for them to catch up with the current economic crisis.

Mr. Mutale noted that prices of most essential commodities have increased but workers are still getting old salaries, which he called peanuts, which cannot sustain their families.

He added that the daily operation of the company is entirely dependent on the local people who have failed to run it, a move he said should also be checked.

And Mr Mutale has bemoaned lack of workers’ safety clothings and appealed to the company management to urgently purchase them.

Mr Mutale said workers had for a long time been using their own safety clothes and tools for them to operate in the factory and in tea fields.

He added that tea fields are infested with snakes and workers are working in fear as they are not protected with gum boots and pairs of overalls.

But speaking in a separate interview with ZANIS, acting factory manager, John Bunda, said he is happy that that the company has started improving.

Mr Bunda said at the moment, production of green leaf is 25 tonnes per day.

Mr Bunda said all the casual workers’ four months outstanding arrears have been paid but admitted that permanent workers have not yet been cleared their eight months’ salaries.

He said there is much improvement at the plantation as inputs were now in place since 200 metric tonnes of fertilizer have been received.

And a check by ZANIS at the tea estate found that almost all the fields were in tall grass because weeding came to halt for about six months after workers went on strike demanding to be paid their salaries and wages.