Sichinga on the lamentations of the ZRA boss

By Daily Revelation Editor

Former Commerce minister Bob Sichinga says the UPND government’s economic policies are crippling the economy, leading to reduced economic activity and a decrease in revenue generation. 

Sichinga’s remarks follow the lamentations from the country’s main revenue collector, Zambia Revenue Authority (ZRA) director general Dingani Banda, who mourned recently about the narrow tax base despite the country’s rich mineral resources.

The fact that this country is not able to get enough from its main export earner, the mines, has continued to defy wisdom. One would have thought that as a nation, we would have by now put in place systems that would have already been in overdrive oiling the country’s revenue collections from mining.

It’s understood that the government is on a policy drive to attract more investment in the mining sector to reach the targeted 3 million tonne output by 2031. However, there is a way in which the government could work out a win-win situation where increased investment goes hand in hand with sustainable development and increased revenue collection for the country. This is especially against the backdrop where the copper prices have for some time now been enjoying some of the best prices on the international market.

There was no need on the part of the government to reduce the mineral royalty tax from 6 percent to 3 percent, as even at that same 6 percent threshold, the mining companies were still going to remain profitable. At that same margin, many more could have actually come onto the market. It is not a good idea to always want to listen to the cries of the same people who are making a kill from mining and selling our precious resource.

We would expect that instead of lamenting, Banda should be urging the policy makers in the administration he is serving to work towards creating an enabling environment where the country should begin to earn more from its mineral wealth. Rather than backtracking on the15 percent export duty on precious stones and metals for instance, Banda should be encouraging Musokotwane to actually scale up the percentage beyond the 15 percent they reversed.

But as we seek to find ways of increasing revenue collections, we must be a country that should learn to take care of the little we have. It is stated in the Holy Scriptures that, “Whoever has will be given more, and they will have an abundance. Whoever does not have, even what they have will be taken from them.”

Which brings us to the other point Sichinga raised, where he questioned the government’s rationale behind increasing expenditure on the Constituency Development Fund (CDF) without identifying the revenue source to cover the expenditure.

We hasten to mention that increasing the CDF is not really a bad idea. However, it is a bad idea to increase the fund without proper safeguards in the management and utilisation of the resource. The nation is already aware about the mismanagement of this well-intentioned programme. Clearly, from that resource alone, we can say that the government is failing to utilise even the little resource that we manage to raise as a country. What needed to be done was to first put a hold on the disbursement of the CDF until all the issues that are causing pilferage were addressed.

Otherwise, the programme will not achieve the intended purpose in the manner it is being managed.