Zambia Refuses to Introduce Taxes Recommended by IMF

By Eddyson Lugangwa Posted 02 January 2007 @ 02:47 pm EET     Print     Reprint     E-Mail     Comments

LUSAKA (IBTimes.com) - Zambian President Levy Mwanawasa said here on Sunday his government would not introduce taxes that could worsen the poverty among the people as recommended by the International Monetary Fund (IMF). "Government is aware of the public's anxiety over the recommendations by the IMF on possible tax reforms.

I'd like to assure the nation that government will not introduce taxes that would worsen poverty situation among our people," Mwanawasa said in his address to the nation on state television on the new year'seve.

The president's speech came after the IMF suggested that the Zambian government reintroduce 17.5 percent value added tax (VAT) on food and other agricultural products, water and sewerage, domestic transportation, mosquito nets, books and newspapers for the 2007 budget.

The IMF proposals received strong oppositions from various stakeholders. The Zambia National Farmers Union (ZNFU) said the proposed tax measures by the IMF on agriculture would increase the cost of production and price of food and consequently hinder the country'sagriculture development.

Former Zambian president Kenneth Kaunda said the proposals on tax by the IMF was "silly" and meant to "punish Zambians". Zambia's Finance and National Planning Minister Ng'andu Magandehowever clarified that the tax proposals were not yet included in the 2007 national budget but would give the ministry good ideas onhow to move on with the tax policy review.

In his speech, Mwanawasa said his administration is committed to building a better Zambia for the people based on the social andeconomic gains made so far. He said the government would soon launch the Vision 2030 and the Fifth National Development Plan (FNDP) in which long- and medium-term development objectives have been articulated.

He said the objectives in the two plans should be able to lead the country into becoming a prosperous middle-income country by the year 2030. Mwanawasa pointed out that Zambia was now better than it was five years ago, citing among others the reduction in inflation rate to a single digit level and the reduction in interest rates.

He said Zambian economy was poised to thrive on account of the ever growing investor and donor confidence which he said would lead to higher economic growth and generation of more wealth and jobs.

Meanwhile, the president has called on Zambians to enter the new year with renewed hope and vigor to develop the country. He asked his people to bury existing difference and to sustain and promote the peace and stability in the country.