By Daily Revelation Editor
Zambia Congress of Trade Unions (ZCTU) president Blake Mulala says wage stagnation, high taxation under the Pay As You Earn (PAYE) regime, coupled with the rising cost of living remain critical concerns for workers.
The Jesuit Centre for Theological Reflection (JCTR)’s December 2024 Basic Needs and Nutrition Basket report revealed an increase in the cost of living in Lusaka, with the basket rising to ZMW 10,833.47, a ZMW 440.31 increase from November.
Reacting to the JCTR Basic Needs and Nutrition Basket report in an interview with Daily Revelation, Mulala noted that the basket, which has risen had left many workers unable to meet basic needs, a clear indication that the current minimum wage was inadequate.
He also said the 37.5 percent PAYE burden on formal workers was unsustainable and called for targeted tax reforms to reduce this burden and broaden the tax base.
We agree with Blake’s observations on high taxations under the Pay As You Earn (PAYE) regime. It’s not fair for one to work so hard for their money and a substantial amount of it goes to the government in the form of PAYE. Quite alright, we understand there are different tax bands where those whose salary is in the of K1, 300 to K5000 are exempted from paying PAYE.
However, the other three categories pay taxes at 20 percent, 30 percent and 37 percent respectively. We feel this is still very high and the government must consider reducing PAYE so that workers can remain with significant salaries after deduction to enable them meet their basic needs such as rent, transport and food, which many of them can’t manage to have for the entire month. This is especially urgent now because of the ever rising cost of living which is putting further strain on the overtaxed workers.
What is sad is that these are not the only taxes that employees are subjected to. For those who are renting, there is withholding tax on rent which most landlords shift to tenants and many other taxes that employees are subjected to from the same salary that has been taxed already.
This, coupled with the rising cost of living and drought have contributed to the challenges many workers face.
In light of the above, we urge the government to increase the tax base so as to reduce the burden that has been placed on workers.
For instance, the government can curb exemptions and reduced taxes on mining houses and this would help to boost the revenue for the government to utilise, unlike the over-dependance on PAYE as one of their biggest sources of revenue.
Offering tax holidays to mining houses for example, results in loss of revenue that would help the government to adjust downward the taxes so that those in formal employment can breath
The country is going through financial, economic and drought challenges and it is critical that as the government addresses these, the welfare of those in formal employment is also looked into by reducing PAYE and broadening the tax base to achieve this.
Related
By Daily Revelation Editor
Zambia Congress of Trade Unions (ZCTU) president Blake Mulala says wage stagnation, high taxation under the Pay As You Earn (PAYE) regime, coupled with the rising cost of living remain critical concerns for workers.
The Jesuit Centre for Theological Reflection (JCTR)’s December 2024 Basic Needs and Nutrition Basket report revealed an increase in the cost of living in Lusaka, with the basket rising to ZMW 10,833.47, a ZMW 440.31 increase from November.
Reacting to the JCTR Basic Needs and Nutrition Basket report in an interview with Daily Revelation, Mulala noted that the basket, which has risen had left many workers unable to meet basic needs, a clear indication that the current minimum wage was inadequate.
He also said the 37.5 percent PAYE burden on formal workers was unsustainable and called for targeted tax reforms to reduce this burden and broaden the tax base.
We agree with Blake’s observations on high taxations under the Pay As You Earn (PAYE) regime. It’s not fair for one to work so hard for their money and a substantial amount of it goes to the government in the form of PAYE. Quite alright, we understand there are different tax bands where those whose salary is in the of K1, 300 to K5000 are exempted from paying PAYE.
However, the other three categories pay taxes at 20 percent, 30 percent and 37 percent respectively. We feel this is still very high and the government must consider reducing PAYE so that workers can remain with significant salaries after deduction to enable them meet their basic needs such as rent, transport and food, which many of them can’t manage to have for the entire month. This is especially urgent now because of the ever rising cost of living which is putting further strain on the overtaxed workers.
What is sad is that these are not the only taxes that employees are subjected to. For those who are renting, there is withholding tax on rent which most landlords shift to tenants and many other taxes that employees are subjected to from the same salary that has been taxed already.
This, coupled with the rising cost of living and drought have contributed to the challenges many workers face.
In light of the above, we urge the government to increase the tax base so as to reduce the burden that has been placed on workers.
For instance, the government can curb exemptions and reduced taxes on mining houses and this would help to boost the revenue for the government to utilise, unlike the over-dependance on PAYE as one of their biggest sources of revenue.
Offering tax holidays to mining houses for example, results in loss of revenue that would help the government to adjust downward the taxes so that those in formal employment can breath
The country is going through financial, economic and drought challenges and it is critical that as the government addresses these, the welfare of those in formal employment is also looked into by reducing PAYE and broadening the tax base to achieve this.
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