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It Is Now Time For An Economic Kamukunji in Zambia

It is now time for an urgent economic kamukunji. Kamukunji is a Swahili word for Public Deliberation on an urgent basis. I learnt that term the very first night of arriving at the University of Dar Es Salaam, Tanzania, years ago. There was, I heard, to be a Kamukunji at Student Square the next day. The way the word and information was passed around, spelt majesty and urgency. The word has stayed with me ever since, though this is the first time I am using it in a column. Kamukunji is not an ordinary meeting where resolutions are passed and shelved. A Kamukunji is only called for rarely and to solve an urgent crisis that is threatening the community and in our case, Zambia.

Unlike the National Dialogue Forum (NDF) whose principal aim was to cement the political hegemony and survival of the ruling political class and whose benefit would principally ensure to the political ruling class and associated political support infrastructure, an economic Kamukunji would be a deliberation for the economic benefit of the majority Zambians. And there would be no need to legislate an Act with threats of criminal sanctions for non-attendance.

Unlike the NDF whose platform points for debate were pre-fabricated elsewhere and what was needed to be resolved was already straitjacketed from prior secret deliberations, an economic Kamukunji would start off by using objective and observable common cause economic crises.

Zambia is in deep economic crises. Everybody agrees with that. The evidence is all around us. It is objective and undeniable. The Kwacha has slid to an all time low of K13 to one US dollar. The inflation rate is close to 8 per cent. It is very difficult and without a formula how to ever bring the inflation rate to single digits if it ever climbs to double digits. Ours is inching towards double digits. Your currency becomes worthless the higher the inflation rate goes. Segments of civil servants, including university lecturers, have increasingly not been paid on time. Delayed pay is one of the surest measures of national economic crises. Youth unemployment is at an all time high. You wonder what the vaunted benefits of education are if you can’t get a job and there is no encompassing social welfare safety-net to tide you over during the crises in the interregnum. Prices of everything are at an all-time high including foodstuffs, fuel, transportation, electricity, service fees for everything, TV subscriptions, school fees and et cetera. And more belt-tightening is being called for. An Economic Kamukunji is called for.

The International Monetary Fund (IMF) has so far refused in a diplomatic way to bail out Zambia because of its unsustainable debt load, a debit load whose actual figure is not publicly disclosed. Does anyone dispute the fact that the IMF has so far diplomatically refused to engage in salvage operations for Zambia is evidence of Zambia’s economic crises? The very repeated trekking to the IMF to beg is evidence of economic crises. Does anyone doubt that we are indebted to the Chinese to the tune of unknown or undisclosed billions? Does anyone doubt that we are in such economic crises that our economy is essentially run by the Chinese and supplemented by American, British, German, other European and Scandinavian aid? That Turkey, the Saudis and Indians are all our saviours!

As demonstration of our economic crises that justifies an urgent Economic Kamukunji, Zambia has embarked on the following unprecedented measures:

  1. We want to introduce Sales Tax in place of Value Added Tax, reasoning without deep public study and debate the economic benefit and impact of that switch. We have had VAT since 1995 after deep study. We want to switch overnight without any serious study. The Zambia Revenue Authority (ZRA) has never until recently disavowed the provenance of VAT. If anything, the problem with VAT is in its administration but not in its sustainability. For example, we have been refunding millions of dollars in VAT to the mining companies while at the same time claiming that mining companies owe Zambia billions of dollars in tax! We can’t even reconcile the two! How do you refund a company for example that owes you money and then the Minister of Finance cries that she has sleepless nights because of refunds pursuant to VAT system. Yes, if the administration of VAT is corrupted as it is pertaining to mining companies or other companies, you definitely ought to have sleepless nights. But this shouldn’t make us jump to another complicated Tax System when we know or should know that it is the administration of VAT that is the problem and not its economic utility.

The world has 195 Tax Jurisdictions and out of these jurisdictions, only 30 engage the Sales Tax as the primary vehicle for raising national revenues. The rest of the 165 jurisdictions do not use Sales Tax regime, they use the VAT system. The majority of the 30 that use the Sales Tax are Muslim countries, military regimes or failed regimes. Sales Tax is used in a few advanced democratic countries like the US because of the existence of State taxing systems and well thought out exemptions that mitigate the devastating effects of the Sales Tax on businesses. Muslim countries have oil and Muslim-specific tax measures which mitigate negative impacts. Zambia intends to exempt exports from Sales Tax but that is not enough. Hold off on the legislation and implementation of the Sales Tax until the jury has been empanelled and deliberated. Parliament is not the jury I have in mind.

  1. Zambia operates a tourism levy to extract funds thus tourism is now a little more expensive than before. The government is desperate for funds.
  2. Because of the unreliable supply and cleanliness of government supplied water, individuals who could afford started digging their own boreholes on their properties. The Government has moved to impose a tax on this family endeavour. This tax grab is unconscionable. The government is broke when you go to this extent of taxation.
  3. Toll gates have been built on major highways from the Copperbelt to Livingstone, raising the cost of transportation for business owners and travelling families and individuals amidst the highest fuel prices ever. The Saudis never came to bail us out after all.
  4. We have mounted cameras on our streets in Lusaka to catch a few speeding vehicles and extort millions of Kwacha from this activity. We never used to have this. The government is desperate for money.
  5. The government has embarked on a K500 reregistration of cars. This is new and has never been done in Zambia or anywhere else in the world for that matter. The government is desperate for money.
  6. The registration fees for new and old companies at PACRA have been increased to raise further government revenues. The government is desperate for money to fund its operations at the expense of business establishments.
  7. Individual use of cell phones is now a taxable activity. How desperate can the government be! Very soon, everybody will be taxed for merely breathing. Taxation while breathing.
  8. Zambians love to watch soccer, Nigerian movies and Zeeworld, therefore making this activity attractive for increased taxation to raise money for a broke government.
  9. Landlords make  a killing from their rental properties thus have attracted the roving eye of the government by requiring tenants to withhold 10 per cent of rent and remit it to government without any payback to the tenant for this service.
  10. Customs Duty for importation of vehicles has gone up.
  11. The informal sector is taxed minimally though this if properly studied and economically taxed, would raise billions of dollars. But the government would rather go for soft targets like toll gates, TV and cell phone users etc than mount a comprehensive review of how the massive untaxed but illusive informal sector could contribute billions of Kwacha to the tax pool.
  12. Mothers are not exempt from government search for money. This soft target is on powdered milk imported from abroad. So imported powdered milk has attracted increased Duty.
  13. Policemen have reappeared again on the roads harassing mostly innocent motorists for money for this little or no infraction at all and only a small fraction of the money collected by the police is ever remitted to government. As far as the public is concerned, this collection on the street is taxation because it is done in the name of the government. Millions of Kwacha are taken by the police during these road stops but this money is not receipted and there is no audit for it. The government and the public lose billions of Kwacha through this method which could go into economic investment. The police are not a soft target. They are at the service of the state. Government only go for soft targets.

Meanwhile billions of Kwacha are allowed to go to waste as evidenced by the reports of the Auditor-General and the Financial Intelligence Centre. Zambia is not broke, the money is simply wasted and unaccounted for through wastage and corruption. But those who waste money or engage in corruption are not soft targets, so the government is not going after them. The hearings of the Public Account Committee displayed and exposed such wastage, corruption and impunity one is constrained from calling for a political revolution. But those engaged in wastage, corruption and impunity are not soft targets. An Economic Kamukunji to lay everything on the table or else, is an emergency.

To discuss all the above matters, economic matters which are indisputable justifies the Economic Kamukunji that I am calling for. Zambians are over-taxed. Zambians are suffering economically. The sparse rains this year will increase the woes of Zambians. The belts which they have been tightening for years are about to snap their torsos. But the torsos and cheekbones of the majority of those attending the NDF are intact as you saw from various pictures and poses. You have seen the girths of the military generals when they stand with the President as they have done severally since January 2019, their belts are loosened. It is the majority Zambians who need to loosen their tightening belts. It is time for an Economic Kamukunji for the benefit of all Zambians and not only for those looking to score electoral victories come 2021.

 

 

Dr. Munyonzwe Hamalengwa particularly enjoyed the following three courses at Osgoode Hall Law School in Toronto: Tax Law; Tax Policy, and International Taxation and has written papers in these fields and continues to maintain interest in Tax matters.

 

forthedefence@yahoo.ca

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