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Kambwili urges tax burden reduction

CHISHIMBA Kambwili has warned the ruling PF that high and unreasonable taxation chokes the country’s economy to death.

He said since no country the world over can tax its way to prosperity, the PF should now reduce the tax burden on citizens and focus on growing the economy.

In a statement, the National Democratic Congress leader lamented that the PF had borrowed too much money in recent years and that the debt level had reached US $16 billion which is far beyond what the country can afford to repay.

“The debt is in United States dollars. The kwacha has depreciated significantly in the last two years, this means Zambia’s debt has increased artificially just by virtue of a weak kwacha. ZRA collects taxes in kwacha, the Ministry of Finance has to convert this kwacha to dollar every month in order to make debt repayments,” Kambwili said.

He said as the kwacha weakens, they have to use more and more of it to pay debt which results in less money for civil service salaries and for social services like health and education.

“That’s why you see no medicines in schools, lecturers not getting paid or COVID-19 samples being transported on buses. The PF now thinks that the only way they can run government is through the imposition of more taxes,” he said.

Kambwili said the downside effect of the taxes was that they made the country and citizens poorer.

“You tax the citizens and send the money to China; it means there’s less money in circulation in Zambia. More taxes mean people have less to invest in business and that stunts the economy. More taxes mean the purchasing power of citizens is reduced, this affects the retail sector because people are not able to buy and it results in store closures and job losses. It’s a vicious none ending cycle,” he said.

Kambwili said genuine foreign investors also avoid countries with high and unstable tax regimes.

He said that was why there was capital flight and investors leaving the country.

Kambwili noted that today Zambians can’t even afford to import second hand cars because import duty was high and the exchange rate was way too high.

He advised those in government that no country has ever taxed its way to prosperity.

Kambwili said the PF government should focus on growing the economy and not on taxing citizens.

“Grow the economy through good policy and stimuli. With an expanded economy, the tax base also grows naturally, you can then collect a lot of taxes from a big base with low tax rates. That’s how taxation is supposed to work. Reduce the tax burden on citizens and focus on growing the economy,” said Kambwili.

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