FINANCE Minister Alexander Chikwanda has reiterated that it would be unwise for the Patriotic Front (PF) Government to reintroduce the windfall tax when metal prices on the international market are unstable and visibly trending downwards.
And Parliament last evening approved the K48 billion allocated in this year’s Budget to the Electoral Commission of Zambia (ECZ) with Kalomo Member of Parliament (MP) Request Muntanga (UPND) urging the House to increase the K2 billion reserved for by-elections.
Concluding the policy debate on the estimates of expenditure for 2012 in Parliament on Tuesday evening, Mr Chikwanda expressed disappointment that former MMD ministers that abolished the windfall tax were now championing its re-introduction.
He told the House that the PF Government was very responsible, dignified and had the full mandate of the people of Zambia and as such would not play to the gallery and act impulsively just because someone was advocating the re- introduction of windfall tax.
The minister said it was extremely important to understand that the measures he had announced in the 2012 Budget address would ensure that the Government got some revenues while the “cow that produces the milk” was left to survive. “It would, therefore, be unwise for the Government to introduce windfall tax when metal prices are unstable and are now visibly trending downwards.
“It is for this reason that I am disappointed by our colleagues who were in Government yesterday and abolished the windfall tax; but are now calling for its re-introduction. Are they really being genuine, constructive and patriotic?,” he wondered. He said the former MMD leaders were not being objective in their debates on windfall tax and were being unpatriotic because their debates were not bordering on stability of investment, ensuring workers security of tenure and facilitating sustainable mobilisation of resources.
“Mr Speaker, allow me to talk about our extremely limited fiscal space or the resource envelop. Against overwhelming legitimate demands by our people all over the country, a Budget of K27 trillion or US $5.5 billion is just a tiny drop in the ocean.
“In the developed countries, our National Budget cannot even cover the annual expenditures of single big universities. Our economy was left by the previous Government at an exceedingly low ebb. The shanty compounds in which the majority of our citizens in urban habitats live have inadequate necessities such as water, sanitation and electricity,” he stressed.
He told the House that Zambian villages in far flung areas had barely seen any development and were even condemned to perpetual neglect and abandonment with rural poverty at over 77%.
“In the midst of all this, the previous Government maintained a budget that was largely targeting consumption in the public service at the expense of poverty reduction and infrastructure development nationwide. This sums up the immensity of the challenge we face collectively as leaders,” he said.
Mr Chikwanda however, hailed the support the Budget received but regretted that most brilliant ideas could not be embodied in the 2012 estimates. The Government would, however, consider the ideas in subsequent fiscal years.
On concerns raised on PAYE, the minister noted that the figure of about 80,000 which he discussed in his speech related to workers who earn between K12 million and K24 million per year and would, therefore, not be liable to PAYE.
“This figure is also in addition to about 112,000 workers who are already not paying PAYE because they earn K12 million per year or less. This means that if you add 80, 000 employees to the already existing 112, 000 employees who are off the PAYE tax roll, then more than 192, 000 workers who are in formal employment will be off the PAYE tax roll,” he said.
He explained that the balance of 500,000 formal sector employees who are in higher income brackets would also benefit because they would actually not be subjected to PAYE for up to the first K24 million of their total annual earnings.
“The way the tax bands have been realigned will entail more benefit for tax payers. This is true empowerment and more money in the pocket of our citizens.
Mr Speaker, the explanation above has demonstrated how our tax package concessions will yield K1 trillion extra disposable income for all workers that earn taxable incomes,” he noted. The minister noted that he would see how he could address concerns on calls to increase Constituency Development Fund (CDF).
Mr Muntanga in supporting the Budget allocation for the ECZ told the House that the K2 billion reserved for possible by-elections was not enough owing to the more than 50 petitions before the courts of law which could result into a mini-general elections if nullifications occurred.
[Times of Zambia]
easier said than done, pf and cheaping.
windfall tax was one of the campaign songs why change now.if you cant trust your own words then disaster is looming.bob sichinga was in the fore front championing the same.
we can forgive you chikwanda,you came in the last minute.you spend most time dozing at parliament.namukula ba mudala.
“He told the House that the PF Government was very responsible, dignified and had the full mandate of the people of Zambia and as such would not play to the gallery and act impulsively just because someone was advocating the re- introduction of windfall tax”. lol….what a U-TURN!! is this not the same party which played to the gallery by advocating to the re introduction of windfall tax during the campaigns??
Is Bob Sichinga who shouted the loudest about windfall tax MMD now?
Is Bob Sichinga who shouted the loudest reintroducing windfall tax MMD now?
I agree with no.2 a government must be Judged by its campaign promises. The PF promised to reintroduce windfall tax. Any Chikwanda was not part of the campaign team since he was got from the archives to be minister, he might not know the promises his colleagues gave. This brings me to something outside the topic, Masebo seemed very happy and condemned MMD. but only yesterday she was MMD, Thats why i dont support the people of Chongwe for giving her the vote. If Chongwe is underdeveloped, its because of Masebo, she has been MP through out until 2011 when Mwakalombe won but then corrupted by Sata to become Ambassador. PF have no integrity because they say one thing and do another.
Windfall tax is the way forward. If it is charged lets say 20% of every tonnage price exceeding US$6000 then automatically if world prices falls below that price its no lopnger an issue. Why giving us theories of world price trends points downwards? Moreover, some of these ministers have never been on the podium of PF campainintg but merely appointed possibly due to loyalt or other considerations. Chikwanda shuold as Bob Sichinga and then he may understand. Sata shuold be carefull as we are watching with highly knee interest. Do not negate on your campaigning promises so early and think Zambians are fools or we wont understand like Mutati once remarked/thought on Zamtel disposal.
Sir/madam,
You are mistaken in your analysis. The trend in commodity prices is that they are going down as the major economies experience falling levels of GDP. This being the case, the windfall is not ‘guaranteed’. You cannot budget on the basis of a possible windfall, you need to have guaranteed income upon which to base your budget, otherwise your books cannot balance. In short, you cannot base your personal expenditure or budget on the possibility that you will win the lottery – it might not happen. During campaigning, the commodity prices were rising, and it was fine to make claims about introducing windfall taxes, times have changed since.
Why backtrack now? We voted for you based on your stance on this issue, so what does this imply to us poor people? I can see there will be no money in our pockets. Kanshi it is true politicians are liars, double tongued. This is unfair, you ministers get commissions from the deals you make and what about us? I am frustrated…………………
*Yawning*…Where did Sichinga get his education?
Don’t worry, liars are given 1 term. Period.
Is that “mulilo wa Jesu” burning on Chikwanda’s face? This could be another state funeral we are seeing here! Too much micomibi, tuchembele twa mwa Zambia kitwa liteka za kaloyawe!
I like that!!!!! LOL!!!!!!!! Amuekeze kushenda kwateni.
Cheap kaponya liars! It was very easy to bark outside the system, now you ve seen how difficult it is to run the country ka???? ati 90 days development…..my foot! indeed its a fwaka goverment full of old tired brains!!!
I think Masebo is now becoming the new VJ of Zambian politics. VJ served four presidents: Kaunda, Chiluba, Mwanawasa and Bwezani. Now Masebo served Chiluba, Mwanawasa, Banda and will within this week be serving Sata. If these were relationships, she will be classified junk whole!
Fellow bloggers? What the Minister is saying is that ”If copper prices were very high and stable (say US$9,000) and that the outlook was bright”, the PF would have introduced the Windfall Tax. However and i quote ”it be unwise for the Government to introduce windfall tax when metal prices are unstable and are now visibly trending downwards”..Those are indeed wise from an Economist..At the time when campaigns were taking place, this was not the case hence the PF promise to introduce the Tax.
If you we rely on Economists and Bean counters you and your company will never take a risk or make any decent profit!!
I know these fools just realised that if the introduce windfall the mines will try to maintain their cost by reducing labour…hence creating unemployment……but the PF is forgeting that when they get more money from windfall they will be able to creat more activities using that money hence creating more employment.
Iwe chee colour ka Chikwanda you were not there when these i.diots in PF were campaigning so just shut your burning mouth if you don’t have anything to say. That snake called Cobra and his sidekicks Bobo Sichinga na chi Kambwili were singing Windfall Tax everyday ad nauseum.
I have a problem with the way PF is changing positions over night. Wind fall tax only applies when mining companies are making huge profits. So the downfall in pricing of copper should not be brought in at this stage. Was the meeting with Chinese investors a sign of brown evelops exchangning hands? otherwises what expains this sudden U Turn. And another issue, is it true that we have over 500, 000 employees (formal) who get above K2m? What I know we have about 500,000 in formal employment. Someone to shade more light.
How about MMD’s change of stance, now that they are no longer on the take??
Don’t worry guys, the windfall tax will be introduced in the near future!! One step at a time. This year we have increased mineral royalty tax by 100%. Watch the next budget
So what do you advice the jobless youths who voted you into power? By the way, you need a facedo, you have enuf cash for a laser op to cover those pox scars that are scaring the children. We pass a vote of no confidence in this PF Govt
So they were just lying to be elected.
Mwanawasa and Magande intoduced the widfall tax. There was a serious attempt to twist their arms by the powerful mining compamies. But Magande supported by Mwanawasa refused to budge. They told the Mines if you are not happy, you are free to leave. The mines stayed. RB and company came, their arms were twisted and the wimps surrendered. The Mines celebrated. PF voved to reverse this. PF entered the ring, became scared at the sight of Big Shaw, and ran out of the ring! Cowards!
Ma pf hardcore die hards what do you have to say about thus muli zee maningi??why the sudden u-turn eh??
Thats the way to go promise people heaven during campaigns and give them hell. Ndonchi ukubeba
OK. SO YOU CHEATED US KA? MMHH? AM ASKING YOU! ANSWER!
I don’t like this “unpatriotic” nonsense from PF. Before elections, Bob Sichinga of PF said RB and Musokotwane were not patriotic by not reintroducing Windfall Tax. Now Chikwanda says MMD are not being patriotic by reminding PF about how they are reneging on their pro-Windfall Tax campaign promises. Can’t PF try being honest just once – JUST ONCE?!
Also MMD left the economy on a very high note. Chikwanda claims there is no money for infrastructure development (water, sanitation, electricity etc) but his boss last week promised every village in Chongwe electricity within 90 days. So who is lying?? Zambians should carefully watch these flip-floppers who have not brought any single bright idea into govt since getting into power.
Good for you danderheads Zambians who like following loud tins without reasoning. What new ideas or policies did you expect from a retired senior citizen? Sata just wanted self actualisation of becoming a President, it is a fallacy for you to think he has your interests at his heart. Stop whining and it is high time you started making politicians answerable to their promises- COWARDS
So Chanda Chimba III was very right by reminding the Zambians the truth about Sata according to the Post on his fli-flop and being a pathological liar !!! We are seeing in less than 90 days the PF denying what they promised to the Zambians. Sichinga on MuVI TV said only a gvt which is not wise can refuse to introduce Windfal Tax. So the current gvt must be very unwise eish!
This is good for the foolish masses in Zed. We told you that these PF lies are just thugs imwe you thought, if you ever think at all, that it was sour grapes. Mwanya mwaimwena nomba.
PF and all their vuvuzelas should apologise to Dr Situmbeko Musokotwane. The man was abused and called all sorts of names….He was dull, a fake economist, a coward, unpatriotic etc etc! Please PF and your kaponyas be man enough and apologise to Dr Musokotwane!
Sad day for Zambia!
YES MULILO WAKWA LESA ( Herpezoster) kukonda kunyenga.
Sata’s FP as started sounding as dull as RB’s MMD. Windfall tax has a set trigger price. below that price it won’t apply & above that it applies.
All these mines will close once the price goes below there breakeven point. Zambia is now doomed for failure, what a mistake we made!
Bantustan people keep quiet.PF is working hard to make our lives improve.
UPND guys are just crying seeing tht bantustan party just managed to win in Bantustan area.
Easier said than done-Apologise to Dr. Musokotwane you Patriotic Failures.
so now u know running a country is not as easy as talking. in many respects PF as an organisation never stated that w fall tax in coming. it was just elements like Bob, and Lubinda Given and the post who made people think PF was going to do it.
once again it should be known that W fall tax those popular among some people its not the only way to gain from national resources
#33@John-Eastern Power, shut up yourself. We are tired of shallow minded bloggers like yourself- contribute meaningfully to the issue at hand. We all know Bantustans will always win in SP. Typical kaponya mentality, you can’t even analyse issues, time waster.
PF are liars, and their policy of Donchi Kubeba is about lying and deceiving.
They believe in being ‘bamambala’ or trick-stars.
Promise people falsely in exchange for their votes, and once you steal their votes dump them.
There is no shame in PF’s lying behaviour.
If PF can lie like this, how do you expect them to be faithful with the national resources you have entrusted them with?
If they lie on almost everything will you believe them when they sing to you that they are fighting corruption? that they themselves are not corrupt? – they are a serious JOKE!!!
They lie to the nation in day light, and you still want to trust them that they will be faithful with the affairs of the nation placed in their hands?? I personally have serious doubts. They are likely to use the same trick-stars mentalities to dupe the citizens.
I’m glad Sata won because this has quenched the tribal bigotry of Northern Janjaweeds. Let him now destroy this lousy British patchwork invention called Zambia, maybe we can now all find our real stance on the sovereignity of this so called nation. Sata has proved beyond doubt that our weakness, and not strength, lies in our diversity. After Sata, Zambia will be beyond redemption, we should be bold enough to realise our only way forward is a Czech – Slovakia option, otherwise it’s war! Let scoundrels whose last refuge is alays patriotism cry out and call me traitor but the truth hurts and they know it.
The “Donchi kubeba” was played on you who voted Patriotic Failures!
Feels good to say “I told you so, PF just wanted your votes”. Their slogans were too good to be true, actually they were just appealing to job hunters and kaponyas!
PF is MMD reloaded people. get used to this fact and you will have a sane mind.
Us older people warned the lynch mob against voting for Sata. They were madly in love with the Cobra. Love is blind! They are now surprised at the many u-turns and feel let down, just shows they did not know him. Enjoy your baby.
Young men, please flee from wayward women. It always ends in tears.
No we will not reintroduce WINDFALL TAX but We will make sure the current NAPSA penalties on late submission are doubled so that those of you who are employers will make sure you contribute. From NAPSA monies we will build houses and business-parks which the president will be free to sell to sitting tenants for a song when elections come. Remember you can only start receiving you pension after you are 55 that is if you don’t die before then. A 20pin contribution late by 2 years currently attracts a penalty of about K180 000.
CORRECTION…No we will not reintroduce WINDFALL TAX but We will make sure the current NAPSA penalties on late submission are doubled so that those of you who are employers will make sure you contribute. From NAPSA monies we will build houses and business-parks which the president will be free to sell to sitting tenants for a song when elections come. Remember you can only start receiving you pension after you are 55 that is if you don’t die before then. A 20pin contribution late by 2 years currently attracts a penalty of about K96 000. This is because our people at NAPSA can over 2 years increase K20,000 to K96,000 after buying tracts of land and renovating people’s buildings and running them to recover investments and still be paid exit fees.
Mining companies have too much clout. After all they go to politicians homes in the stealth of the night with breifcase full of the green stuff.he who pays the piper call the tunes.
Believing and trusting PF is like someone who is told the coin which toast up fail tail up; and he believes. He is told by the same person that it also fail head up; and he still believes.
If you believe that PF wont plander the resources of the nation after you have seen how canning there are, you are just like the above guy who finds no problem in believing anything as long as it has been said.
O! Zambians, the boat is sinking and has U-TURNED. Where is Italian Bwangu Bwangu(Original) to save the sinking ship towards the storm(90 days) is at hand. Is there any TRUST left to be in the sinking boat with hole all over. Bring life saving jackets(Dr Guy Scott save the boat. Zambians watch it sink slowly, helplessly, OWEEEE.
Need i say we told you…
Many of us who were called names have been vindicated. Why i asked what experience and qualification Bob Sichinga had to be called an Economic Consultant i was called names.
What a nice country which has gone to the DOGS
You will never be president anyway, stay in Australia and eat kangaroos and get blind drunk with Aborigines
Well done PF and Chikwanda on this windfall tax nonsense. It is not just a matter of taxing the goose that laid the golden egg. Let us look at the princiles here e.g. more investment in mining, further developing the Zambian mining industry and skill base, more jobs for the youth and need I say more. Windfall tax, by definition, is unsustenable and at the whims of the markets. Those calling for it are simply narrow minded, big government psychophants. Please look at the bigger picture. Again, well done Mr. Chikwanda, Sir.
PF are liars, and their policy of Donchi Kubeba is about lying and deceiving.
They believe in being ‘bamambalas’ or trick-stars.
Promise people falsely in exchange for their votes, and after stealing their votes dump them.
There is no shame in PF’s lying behaviour.
If PF can lie like this, how do you expect them to be faithful with the national resources you have entrusted them with?
If they lie on almost everything will you believe them when they sing to you that they are fighting corruption? that they themselves are not corrupt? – they are a serious JOKE!!!
They lie to the nation in day light, and you still want to trust them that they will be faithful with the affairs of the nation placed in their hands?? I personally have serious doubts.
If PF can lie like this, how do you expect them to be faithful with the national resources you have entrusted them with?
If they lie on almost everything will you believe them when they sing to you that they are fighting corruption? that they themselves are not corrupt? – they are a serious JOKE!!!
They lie to the nation in day light, and you still want to trust them that they will be faithful with the affairs of the nation placed in their hands?? I personally have serious doubts. They are likely to use the same trick-stars mentalities to dupe the citizens.
Believing and trusting PF is like someone who is told the coin which toast up fail tail up; and he believes. He is told by the same person that it also fail head up; and he still believes.
PF may easily plander the nation
#50 The Engineer (Australia)
How about MMD’s change of stance, now that they are no longer on the take? Its far better with PF in power than those filthy lowlifes thugs MMD who just cared about their thieving fat backsides. If there was an election tomorrow they people would still vote overwhelmingly for this government any time any day. If MMD won they wouldn’t have even touched royalties, they would only just increase the thickness of their envelopes, & Austin as Labour Minister again!LOL They were singing about Middle Income yet they were accumulating money & burying the excess like squirrels for a rainy day. Those MMD & BOZ crooks had changed our currency printer without informing the public, why? so they could manufacture more for themselves. PF any day, any week, any month!
The Bantus will have the last laugh, more comedy unfolding or is it horrors?
Who is a PF cadre?
A ball is the most undirectional object in the field.
The player kicks it in any direction and it will go.
It understands nothing about what is happening; such that even when a defender kicks it in his own goal it will go in.
This is how PF cadres are.
SATA can kick them in any direction he wants they will support.
He can tell them I will bring constitution in 90 days – they clap; I will not do that; they clap.
I will bring back the windfall tax; they clap. I will not bring it back; they clap.
I will scruitnise the Chinese investors; they clap. I will not do so; they clap.
SATA is seing the PF cadres as footballs and sees himself as footballer of the year. I think he will view himself as footballer of the year for the next five (5) years.
In the meantime, the Watchdog reported that Mulenga Sata is now driving a Jeep (from Spacio) in 90 days out of selling dogs and whisky whilst you are waiting for more money in your pockets from wind fall tax, what danderheads Zambians are!
yaba..we knew these chaps would never do anyhting more humane..mwapya bamambala ba pf..brace urselves for hard times ahead..
How does Zambia benefit from its mineral wealth ??
only a paltry $200 million from mineral tax
the increase of minerals royalties to 6 percent from 3 percent for base metals such as copper, and to 6 percent from 5 percent for precious metals
even former thieves bought and paid for by foreign mining companies would have increased it !
the windfall tax will not be re-introduced…
Now if the govt refuses to raise its stake in mines, Sata would dupe and betray the Zambian people within 90 days…
All i can say is dont kudabwa
This is what the Windfall Tax is, per pound. The prices are derived from the international markets, and therefore cannot be fudged.
0-2.00 0%
2.00 – 2.50 25%
2.50 – 3.00 50%
3.00 – infinite 75%
Example: average copper prices for the year are 3.10.
Taxes paid:
(.50 x .25) + (.50 x .5) + (.10 x .75) = 0.45
Turnover: 3.10
Taxes: 0.45
Gross profits: 2.65
That is how the Windfall Tax works. Remember that for every cent that the copper price rises above the mining company’s breakeven point, they don’t have any extra expenditures, so it doesn’t cost them anything. It’s free money, which is why the state deserves it’s share before it starts taxing the people’s labour.
From Guy Scott in The Post of Februari this year:
Getting our pound of flesh
By Dr Guy Scott
Wed 02 Feb. 2011, 04:00 CAT
One of the attractions of the windfall tax to many commentators is its apparent objectivity. You take the amount of copper produced, multiply by the LME price in excess of the various “trigger points”, and alleluia, you have Zambia’s share of the action. By contrast, the system currently in force is heavily dependent upon taxing computed profits, and many people suspect that profits are less than objective. There is too much fudge-factor: non-transparent “hedging”; losses carried forward; so-called corporate responsibility expenditure; these and those allowances; transfer pricing; negotiated exemptions.
(Continued…)
Let me emphasise that, viewed purely as a mathematical formula, the present tax regime, if applied objectively, would yield about the same revenue as was targeted by the windfall tax (i.e. 40 per cent plus of genuine profit). So there is no real argument about targets. It is the ability and will of the Zambian authorities to collect all of it – i.e. to hit the objective level – that is of concern to those of us who know our country. And after all, if countries that enjoy the advantages of sophisticated administrative machinery such as the UK can suffer from corporate evasion of profits tax, then how can we to be sure we can collect all that is due to us?
Ok Mr K how much tax does Glencore pay? It’s a secret
HH WILL NEVER BE PRESIDENT hahahaha
60 Airtime Sakala,
” Ok Mr K how much tax does Glencore pay? It’s a secret ”
Or, how much profit do they make? In fact some of these mining companies cannot even be depended on to properly declare their revenues and resort to smuggling. Their licenses should immediately be revoked.
Mrk
You sound very smart. However, all big mining companies do not sell copper at the spot price. Thats why if you wanted to buy physical copper you will find it difficult because most production has been sold forward at much lesser price than the spot price… (most around US$ 5000 to 6000 per ton)
And thats what your friends in PF just found out…… hence why the Windfall tax can not work.
#67 you should have said this sooner. as for #54 the last person to have an overwhelming vote was FTJ not the chaps you are talking about. though i must say you are right about MMD thieves.
#67 The “Engineer” you are a clown…!
read FQM accounts : Q3 – September 30, 2011
Gross copper selling price (per lb) (YTD 11) : 4.04 ie 8900$ per ton
Net realized copper price (per lb) (YTD 11) : 3,78 ie 8320$ per ton
even without cash cost profits are huge !!
you cant be able to read and understand accounts of muzungu and wachina companies
but you to stick your nose in MrK comments
Engineer !!?? LOL LOL
Imwe bantu stop these calculations, the Presido doesn’t like “Caculator Boys” -lol……………
” the 2012 Budget address would ensure that the Government got some revenues while the “cow that produces the milk” was left to survive ”
Some revenues? That’s a crime. If the PF was payed for threatened not to collect taxes from the mines, I want to know about it. This is what Robert Sichinga called the MMD’s refusal to collect taxes that were due from the mines:
” And Sichinga, who has described President Rupiah Banda and Dr Musokotwane as unpatriotic for opposing the reintroduction of windfall tax, has charged that despite increasing pleas for maximising revenue collections from the mining sector, the government has continued to be adamant and irresponsible. ”
Adamant and irresponsible describes the PF right now. I’ve never heard of a cow being milked to death.
MrK you are right…
Remember… the same rhetoric :(
Musokotwane, Tue 27 Oct. 2009
“He said the current regime governing the mining sector favoured increasing attraction of investments into the country’s main economic stay than to “kill the cow before it starts producing milk.”
“If we force them mining companies to pay by getting taxes when they are not in the position to do so, the incentive for them to expand their operations will be killed,” Dr Musokotwane told parliamentarians.”
——-
foreign mining companies will continue to plunder zed as long as a zambian “Patrice Lumumba” wont be elected
for the moment zambia has an impostor !!
Hi MikeTe,
You’re doing great work.
” foreign mining companies will continue to plunder zed as long as a zambian “Patrice Lumumba” wont be elected. for the moment zambia has an impostor !! ”
We need a planet wide law that bans the sale of raw materials to anyone except the state, and the state can sell raw materials at international market prices only. No sweetheart deals, no bribing ministers for selling state assets at the lowest price. Let’s make the WTO work for us, not the corporations.
That would end 99% of all wars and poverty on the continent.