FFTUZ 2019 National Budget Expectations: “Taxes And Transformative Growth”

SEPTEMBER 11, 2018

Lusaka: as the minister of finance and national planning is preparing to present the 2019 budget to parliament this September, Federation of Free Trade Unions of Zambia (FFTUZ) is expecting a budget that should not only realistically translate into uplifting the living standards of workers and the poor, but also spur transformative growth in the economy.

Fftuz therefore proposes an increase in the pay as you earn (paye) exempt threshold from the current k3300 to k4000. The union feels that the k3300 exempt threshold is too low in view of the high cost of living as well as weakening purchasing power of the kwacha. It is therefore very important for government to consider providing relief to workers.

In addition, whilst acknowledging the economic difficulties the country is in, FFTUZ is concerned that government has continued relying on workers to fund the treasury by overtaxing them. The union therefore proposes that PAYE rate on those earning between k4001 to k7000 should be 18%; from k7001 to k10,000 to be paying 25%; while those earning beyond k10,000 to be taxed at 30%. Government should realise that workers need to be given an opportunity to become entrepreneurs and tax reduction can motivate them to invest in small businesses which could potentially benefit the economy.

FFTUZ further expects next year’s budget to promote local small-scale industries through creation of manufacturing and export processing zones at provincial levels. These zones which can be modelled around the concept of multi-facility economic zones (MFEZ) should however be reserved for Zambians or where there is a joint-venture, with a foreigner.

“We propose that the budget should encourage creation of manufacturing zones at provincial level where small scale industries operating in these zones can be given tax incentives. This would encourage value addition of produce at provincial level as well as create employment. For instance, there would be no need for a farmer in Chipata to transport raw soy beans to Lusaka. Government therefore needs to make available land and other infrastructure in these zones. Once this is done, farmers would have ready and easily accessible markets; and a lot of youth would be employed as well,” says president Mr. Chingati Msiska”.

In this regard, FFTUZ expects the budget to be tailored towards promoting value addition in the agriculture and manufacturing sectors.

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