By Staff Reporter
Former Commerce minister Bob Sichinga says the small businesses which are mainly the ones expected to pay the adjusted upward minimum wages are being squeezed with the mining companies receiving huge tax concessions at the same time.
Speaking with Daily Revelation, Sichinga said at the same time when small business require concessions on account of President Hakainde Hichilema’s stated claim to reduce the cost of doing business, they are today being required to folk out the increased minimum wages while the industry the country relies on, mining, is receiving heavy concessions.
Sichinga said he had a challenge comprehending the economic issues was the coordination between the cost side of the economy against the income inside.
“Now in the mean time the President is talking about reducing the cost of doing business. How are you going to do both? You can’t do both. So I have answered the question, what can we see? We are going to see the companies getting rid of the casual workers and expecting people to do much more because they will say we are paying you more,” Sichinga said. “The thing is this. The government seems to be hell bent at supporting mining industries but they are not looking at it in terms of the entire economy. You need to look at the entire economy. If you are going to give concessions to mines how much more will the small scale businesses? They need it even more than the mines do. So that’s the lack of balance that is happening. That’s the way I see it.”
He said he was in favour of wages being increased but that was being done at the expense of squeezing the businesses, saying the mines have been given concessions, with the burden of paying the huge taxes left to the Zambian businesses, especially the small companies.
“For example they have increased the (electricity) connection fees for organisations. Which organisations are going to do the connection at K15,000? It’s the small scale businesses. So you are increasing the costs on one hand, that’s what they are doing. Meaning that business now is squeezed. So where are they going to pay the cost for the justifiable wages? Why justifiable? They are justifiable because the costs have gone up for the ordinary person. The consumer price index has gone up, so it’s fair to give the worker a wage,” Sichinga said. “The question is where will the income for the businesses even for the government come from, when the income side, the people who are supposed to pay such as the mines you are giving them concessions? In other words the mines are paying less. From 6 percent to 3.1 percent for royalties. So where is the income going to come from?”
Sichinga said the small businesses who are being squeezed will simply get rid of the people, wondering if that was what the government wanted as it did not make sense to him.
He said aside from people losing the jobs, the companies will also pass on the cost to the consumers and the people contracting them, meaning that the cost of doing things will go up and thereby increasing the cost of living in the country.
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