Economic Empowerment Action Group hails budget
The Economic Empowerment Action Group (EEAG) has hailed the 2014/15 proposed budget pointing out that regardless of donor support withdrawal taxes rates have not been increased against popular expectations.
Speaking in an interview on Wednesday EEAG president Lewis Chiwalo said although the government has been grappling with matching expenditure and revenues, the proposed budget has cut corporate tax rate from 33 percent to 30 percent in the telecommunication sector for mobile phone operators.
Against a background of persistent outcry from minibus operators on the need to level the playing field with the operators of large buses, Minister of Finance, Planning and Economic Development Goodall Gondwe announced that the government has agreed to remove the import duty, import excise and VAT on minibuses that are zero to five years.
In reaction to the tax developments, Chiwalo pointed out that this is going to facilitate the growth of the transport sector by bringing better minibuses.
The group’s president hoped that the improvement in the transport sector will induce better fares and access to markets which will ultimately trigger economic growth thereby making government to collect more in taxes.
Faced with donor withdrawal, mounting domestic debt and arrears, Gondwe last week presented a K742.8 billion budget which has a glaring K107 billion deficit.
Earlier, before the proposed budget was presented, analysts had cautioned government against raising tax rates or introducing new ones to bridge the fiscal gap.
Chancellor College professor of economics Ben Kaluwa warned government against raising tax rates arguing it may reduce tax revenue, negatively affect the competitiveness of the local industry and subdue economic growth.
