By Mercy Chewe
Former Chief Government Whip Steve Chungu says the New Dawn Government is contradicting itself by attempting to borrow money from the International Monetary Fund (IMF) when it is under taxing mining companies.
Mr Chungu, the immediate past Luanshya Member of Parliament, said Zambia has the potential to get more money from mining taxes compared to the amount it wants to borrow from the IMF.
The Luanshya based politician and business executive said the Government should reconsider the waiver on Mineral Royalty Tax in order to earn more from mineral resources.
Mr. Chungu said the statement by Finance Minister Situmbeko Musokotwane that mining royalties are being deductible from income taxes to reflect a measure of both incremental and aggregate norm values were unrealistic.
“Zambia is the only country in the whole world that has opted to borrow money while giving away its sovereignty. Zambia is giving away its God given rights over mineral resources. The money that should have been collected in the form of Mineral Royalty Tax is more than what the country wants to borrow in the name and term “Best practices”. Yes it is not wrong to borrow or copy the so called best practices but we should understand that the countries we are copying from have different social needs. Countries like Chile that we want to copy from have different economic needs, different cultures, different traditions, different races from ours, different tax collection avenues and many other different things from ours,” Mr. Chungu said.
“Mining has been going on in this country for a long time now and we have never seen the so-called investors declare profits before. How sure are we that this time around investors are going to declare profits in which the Government can get taxes? We know that these investors will always sell their copper and other un-declared minerals using their offshore companies below the London Metal Exchange price. The Government should reconsider the waiver on Mineral Royalty Tax in order to leave a breathing space for the common Zambian. Can you imagine a retiree, who owns a simple house being followed by the Zambia Revenue Authority (ZRA) for the rental withholding tax. This has become a common feature now with the presence of ZRA officers in our compounds,” Mr. Chungu stated.
He added:”I believe we can do better if we can go back to the drawing board on Mineral Royalty Tax and give back that which rightfully belongs to the people of Zambia who are being over taxed. Zambia can earn more money from mining taxes compared to the amounts the Government wants to borrow from the International Monetary Fund (IMF).We are inviting the IMF to be administrators of this country by borrowing from them.”
Mr. Chungu warned the New Dawn Government against dealing with the IMF.
He said there has never been a country in the World that has improved after dealing with the IMF.
“We don’t seem to have learnt from our previous relationship with the IMF. There has never been a country in the World that has come out to be a better country after getting into a relationship with the IMF. We are going back into another era of colonisation by the western world and other rich countries. Some of these international organisations and rich countries don’t mean well and they have never meant well. I cry for my Zambia, your Zambia, my country, your country and together with our country,” Mr. Chungu concluded.
Minister of Finance and National Planning Dr. Situmbeko Musokotwane last week told Parliament that Zambia needs the IMF assistance.
Dr. Musokotwane said the IMF alongside other international bodies can help to broker a deal between the Zambian government and the creditors or those that the government owes.
In a ministerial statement, Dr. Musokotwane said the intervention from the IMF will enable the Government to get onto an IMF program that will make it possible for Zambia to access long term concessional funding in future.