THE Patriotic Front (PF) government will not re-introduce the windfall tax to save the economy from collapsing as earlier promised during the campaigns. They have U-Turned.
Republican Veep Guy Scott has since urged Zambians to seek relief in the US$200 million royalty tax that has been gained from mining companies.
Dr Scott, who was reacting to statements by some trade unions and stakeholders that the PF cheated people using the windfall tax said the government had managed to remove US$200million from the mining companies and transferred it to the workers in form of Pay-as-You-Earn (PAYE).
Dr Scott explained that whether the money drawn from the mining companies would be referred to as windfall tax or mineral royalty, the fact remains that the Zambian government had gained a huge amount of money and relieved workers from paying high taxes.
He said the new PAYE in the 2012 national budget was the start of better things to come while the taxation system was still under review.
The vice president said the US$200 million gained from the increased mineral royalty tax had been imposed on the mining companies to close the gap created by the reduction in thresholds on PAYE and seeks to earn ordinary Zambian workers an average of K1 million on their take-home-pay.
In an interview in Lusaka yesterday, Dr Scott said the increased mineral royalty tax had not reflected in the 2012 national budget because the amount had been captured by the mineral royalty tax. The vice president said the mineral royalty tax was the best form of tax because it stops mining companies from cheating government in terms of how much they were making.
Dr Scott said the government had not stopped managing the tax system to ensure that it benefits the Zambian people.
He said the tax was determined by the volumes of copper they had sold.
hot brazier
November 15, 2011 at 9:15 am
dont kupapa
George jere
November 15, 2011 at 9:34 am
I guess it is the only logical solution.a u turn.
The major question to address; if you have a windfall tax then any government should also provide for a windfall loss!
This xenophobia currently exhibited by some zambians is reckless and should be resisted for the national good.
Anzhi Makhachkala 1 (OG) Arsernal 3
November 15, 2011 at 9:40 am
Call it windfall or mineral royalty tax – all we want to know is that the mines are paying a tax that is in line with what the earn and that as GRZ you are using that money for the benefit of all citizens and not just your cadres or party financiers as was the case before. It is understandable to alter yo plan now that you are in power and have realised that yo initial plan was not as good.
kakonkonte
November 15, 2011 at 9:40 am
politicians ar children of the same father from different mothers.Easier said than done. why ar u justifying ba scot, we expect mo u turns from yo camp,infact yo exit will be mo embarrassing than RBs, coz u made us raise our hopes but in vain.
Anzhi Makhachkala 1 (OG) Arsernal 3
November 15, 2011 at 10:05 am
Bakakonkote mukwai, It will take a very hopeless president to be worse than RB. In Africa, for an incumbent to lose indicates serious hopelessness on him. PF cant be that bad. There is nothing wrong with changing one’s mind, esp when u realise it is for the good. Saul in the Bible changed. De Klerk down south changed.
managers
November 15, 2011 at 3:40 pm
i even wounder why you now hope for a better government when you say they are from the father.you want to become a different father?
inside story
November 15, 2011 at 9:46 am
PF GOVT IS BEING TACTIFUL IN ITS APPROACH,WE NEED THESE INVESTORS FOR OUR COUNTRY TO MOVE FORWARD.ZAMBIA IS MUCH SAFE IN THE HANDS OF PF AND SATA
Shu Shu Shu
November 15, 2011 at 10:00 am
You are a pure PF cadre
Nak
November 15, 2011 at 9:49 pm
@ inside story you are right. One thing people with small brains dont comprehend is campaign and Governance. I think its time people came out of campaign issues into the reality. The PF in governement is looking for the best solution that would not destroy investment in the country but also not disadvantage the Nation. PF GVT is actually the best as at now despite not doing as they said in the campaign. I believe PF is faced with reality and I would ask people to face reality too. Finaly It would be good for the gvt to explain to people what windfall tax is so that they know the weaknesses of windfall tax
Anzhi Makhachkala 1 (OG) Arsernal 3
November 15, 2011 at 10:08 am
We are not PF cadres but citizens that can say NO to a wrong like appointing Xavier and YES like K2m tax free and reduced bank core liquid rations and mines paying more and Agric paying less tax.
Ninety (90) Days at work
November 15, 2011 at 10:18 am
A lot of U-turns going in this government. We were duped guys. Now even the likes of Simon Miti the Kapoko conspirator getting jobs!
managers
November 15, 2011 at 3:35 pm
you are the dump one coz you are talking without not within.you wish your cousin was appointed aii?
ngoshe pa nkoloko
November 15, 2011 at 10:31 am
the difference is the same whether it is u-turned or a go ahead,..thanx pf govt…you are sincere in your u-turns…you are not doing things mumfimfi
Iyee Mayo
November 15, 2011 at 10:43 am
This is what is hurting us as Zambians when you impose wrong decisions and wrong people to rule this country. There are a lot of poeple in this country who still have entergrity in them and yet you go and pick people like Simon Miti, who has not been made to answer any of them many quetions the Zambians have for him. Mwamba, we dont’t want him making decisions on our behalf. please stop imposing quoestionable characters on us Mr. President.
managers
November 15, 2011 at 3:34 pm
live with it or die with it. i think you should start thinging of the reasons why he appointed these guys.is it experience?is it because he sees a need for these people to help regardless of their background.the devil you know is better than the angel you dont know.do just dream and wish to be satisfied.,you dont know what exactly is going on.your own satisfaction will most of the times be not fallfied.SCHOOL is important and WISDOM you should pray for.i dont hurt you.
Its Sata again
November 15, 2011 at 11:20 am
Ami nayukile, Sata wujitu nobe longolo wakamfutu. He has the heart of a cobra which feast on a bird which rescued it from the fire. Sata nebalongo banji bomwapa butangi… Kashika!
Citizen
November 15, 2011 at 11:22 am
Fellow citizens, let us understand this, Windfall tax is dependant on profits made by the mines, this profit can be there or not depending on the price on the international market. But the mineral royalty tax will always be paid by these mines whether the price of copper goes down or not and this giveing our Government a steady cash inflow to close the gap left for relieving the employees on the PAYE.
Pastor Chris Musonda
November 15, 2011 at 11:27 am
Windfall tax
Investopedia Financial Dictionary:
Windfall Tax
Home > Library > Business & Finance > Investment Dictionary
A tax levied by governments against certain industries when economic conditions allow those industries to experience above-average profits. Windfall taxes are primarily levied on the companies in the targeted industry that have benefited the most from the economic windfall, most often commodity-based businesses.
Investopedia Says:
As with all tax initiatives instituted by governments, there is always a divide between those who are for and those who are against the tax. The benefits of a windfall tax include proceeds being directly used by governments to bolster funding for social programs. However, those against windfall taxes claim that they reduce companies’ initiatives to seek out profits. They also believe that profits should be reinvested to promote innovation that will in turn benefit society as a whole.
Windfall taxes will always be a contentious issue debated between the shareholders of profitable companies and the rest of society. This issue came to a head in 2005, when oil and gas companies, such as Exxon Mobil who reported profits of US$36 billion for the year, experienced unusually large profits due to rising energy prices
Read more: http://www.answers.com/topic/windfall-tax-1#ixzz1dlT3vaxK
democracy pazed
November 15, 2011 at 11:28 am
Oops !!Really Zambians should start reading.It seems most people don’t understand Windfall taxes.PF has increased 100% taxes on mines(From 3% to 6%) which is like windfall taxes.
The advantages of mineral royalties is that mine companies will continue paying for it whether they make profit or not.When it comes to windfall taxes the mine companies will only pay when they make profit.So people complaining should go and read before they start making noise.Furthermore,the budget was already prepared before PF coming into power.PF had one month to make some changes in the budget.Not only that,u can’t change everything at once.People expecting handouts from govt should t just work hard especially Bantustan people who just criticize always.We need to support PF for changing Zambia.Viva PF
Citizen
November 15, 2011 at 11:28 am
Fellow citizens, let us understand this, Windfall tax is dependant on profits made by the mines, this profit can be there or not depending on the price on the international market. But the mineral royalty tax will always be paid by these mines whether the price of copper goes down or not and this will give our Government a steady cash inflow to close the gap left for relieving the employees on the PAYE.
Citizen
November 15, 2011 at 11:32 am
Thank you democracy pazed, you are the People we want, teach them. PF is working and they understand issues.
uncircumcised William
November 15, 2011 at 11:47 am
TUMFWEKO I HOPE YOU ARE LIVE TO THEFACT THAT THE GOVERNMENT SAYS THEY WILL NOT INTRODUCE NEXT YEAR. THEY HAVE NOT SAID THAT THEY WILL NEVER INTRODUCE IT, THEY NEED ALOT OF NEGOTIATIONS COZ THIS CONUTYR HAS BEEN LEFT IN A MESS BY RB WHO GOR COMMISSION FROM ALMOST EVERY CORNER OF THE COUN TRY BY SIGNING RUBBISH BILLS AND LWAS.. WE NEED CARE TO DO THINGS
Mwitwa
November 15, 2011 at 11:51 am
Anyone in here plz explain a bit abt wat windfall tax is?
The DokTech
November 15, 2011 at 11:58 am
The PF has failed i.e the Lilayi illegal land allocation, the Zamtel saga(we are waiting for the reversal which Sata promised), NAPSA saga and mobile hospitals which the PF is now saying was/is a good idea. The problem is we forget so easily.
managers
November 15, 2011 at 3:46 pm
the problem is you think so easly and failed to think fast but slow.should everything be done at ones?fast is equal to crash and slow is flow.they are issues that should be looked at and not just implimenting ignorantly.you need are psycal teacher.
PIKE
November 15, 2011 at 12:13 pm
citizen you are the real citizen congrats 4 that integrity reasoning.windfall tax is taxed on supernormal profit meaning no such profit no windfall tax. on the other hand royalty tax is done on the gross profit of the sale of copper. meaning roalty tax is automatically GRZ will pocket this amount as opposed to windfall.
strongman
November 15, 2011 at 12:18 pm
i hav come to understand why this country cannot develop its bcoz its pipo ar jst gud at tokin rubbish wen they dot understand the whole thing or wat is happenin,wen they can nt see why the u-turn has happened but busy tokin rubbish…if first u could understand why the u-turn has happened then start tokin than jst tokin jst bcoz it has nt being fulfilled does mean it is nt a deliberately move but sumthin behind it….the problem is tht u lyk getin smoke leavin fire…so shut up if u dot knw wat u ar sayin than makin noise anyhow..go work & make more in yo pocket thts all…….
Politician
November 15, 2011 at 12:22 pm
Mwe Mbwa,Ba Pushi,Ba Kolwe all politicians are the the same.DONCHI KUPAPA
Wezzy
November 15, 2011 at 12:43 pm
Pushi niwe chikala. You ignorant ***** go to school then you will understand that PF means well on its U turns.
managers
November 15, 2011 at 3:51 pm
this are the kamushis we have in zambia who can not think but talk nosense.i think we should talk about exporting ignorant fools like politician who does not even understand the meaning of knowledge.grow up man.
tk
November 15, 2011 at 12:32 pm
@strongman I agree with u man. U remaind me of that guy who oz very blank on 2milion expt tax. Instead of asking we calculate for him he went on misleading his fellow mmd
The Don
November 15, 2011 at 12:36 pm
Royalty tax has been increased from 3% to 6%,from my understanding it even works better than the windfall tax you’re crying about (which is based on profits and profits are prone to a lot of manipulation) coz it’s based on the value of copper produced,which means if the value of copper increases mineral royalty also increases and if it reduces mineral royalty also reduces…that is very fair. The fact is mines are paying more tax than in the previous regime. People you shouldn’t just talk shit when you don’t even understand anything,do your research..
Kolwestan
November 15, 2011 at 12:50 pm
The isssue here is thay have u turned on windfall taxation. forget your irrelevant pseudo-intellectual discussions.
The Don
November 15, 2011 at 2:32 pm
That’s why you are an *****,the issue is the mines paying more tax chikala.Some1 brings you something better than they promised ati they’ve u-turned.
Wezzy
November 15, 2011 at 12:45 pm
You are right.
katongo
November 15, 2011 at 12:46 pm
Don’t just criticize without knowledge. The West is in a financial mess! Another recession,is looming just look at what is happening in Greece,Italy and Spain. Therefore it is a very wise decision not to re-introduce Windfall Tax
DAVIDO
November 15, 2011 at 12:56 pm
Politicians lie!
Atishani apa
November 15, 2011 at 1:16 pm
These pipo who are browsing using phones are talking too much,what do you know about wind fall tax?Dont just talk out of frustration and hatred our government is working and if you cant see that try to consult a spiritualist maybe you will be helped.God bless our president God bless Zambia.
bemba tulateka
November 15, 2011 at 1:29 pm
LIARS AND LIES, PF for lying.
The Interlocutor
November 15, 2011 at 1:55 pm
Citizen ndiwe wa nzelu.
Infact changing your mind when you realise it’s for the good is a more sensible thing a human being should do.The veep said the change in PAYE is only the begining while the govt is reviewing the tax system.What else do you expect,bankrupt the investors? we are not robbots people!!
SYLVANUS
November 15, 2011 at 2:27 pm
Zambia is full of ignorant people. Those who doesn’t know what Windfall Tax is are the ones complaining about it.
let me simplify this for you *****
1) no abnormal profit, no Windfall tax.
2) whether there is more profit or not, mineral loyalty will always be paid.
3) windfall tax is dependent on how much profit the mines have made, whereas mineral loyalty is paid whenever copper is mined.
The PF govt has increased mineral loyalty by 100 percent. At least they have done something positive and that’s not the end.
Get some education people.
Mwanamfumu
November 15, 2011 at 2:43 pm
@ Ba Citizen and Democracy Pazed,You are the the people we want apa pa blog. Notchi ifyakweba ati umuntu alesabailafye without understanding the subject.Mines must pay us weather they make profit or not (Mineral Royalty). Mines only pay when they make Profit (Windfall Tax).
Actually PF & Bashikulu ba SATA are just being true to their own blood,Ba Sata is on record in 2007 he led a protest against the Windfall Tax when the Mwanawasa regime Introduced it.
Nak
November 15, 2011 at 10:14 pm
Now you are talking. Mines will cheat the Government on windfall tax. It is very easy to lie. PF the GVT of the day is just on point.
managers
November 15, 2011 at 3:18 pm
the problem with us zambian is that we talk to much without thinking(politicising).if the pf went on with the introduction for windfall tax with the already agreement in place by the previous gorv. dont you think they could have gained a bad reputation and causing the companies to go?a govrment agreement is a gorvment agreement,weather you have a new pf or old mmd.you are the some people who could have started protesting for job losses coz you forced the gorvment to make a decision at a wrong time.and the oppositon know that the pf made the right desicion for now but you all want to be opposition when you have to thank them for more money in the pockets.mind you,introdution of the windfall or not you could have still the same benefits you’ve been given.please let us start behaving like literate people and not opposition leaders who only want to look for faults and find a way up for themselves.
Mainza
November 15, 2011 at 3:43 pm
Ba shikula ba Sata has revoked the appointment of Miti. Watch the pace.
Mwanamfumu
November 15, 2011 at 4:06 pm
@Mainza Mwandi Bashi Kulu nabena, why doing certain things without consultation. Any we love you Mr. President & we still have a lot of Hope in you.
true blue
November 15, 2011 at 4:07 pm
Aren’t these the same people who were putting MMD under pressure to re-introduce the windfall tax? They promised us that they will re-introduce windfall tax once voted into government. Politicians ??????????? What has happened to the promise now?
Amano Yacifyalilwa Epela
November 15, 2011 at 4:33 pm
The Windfall Tax applies to profits posted by a particular payer. Though I am not an accountant (but an engineer!) I still do understand that ” Profit is a concept while cashflow is a fact”. In other words, a business organisation can choose whether to post a profit or a loss but what really matters is the operating cashflow or its equivalent approximation i.e. the EBITDA Earnings Before Interest Taxation Depreciation Amortization. Viva PF!
langs
November 15, 2011 at 4:36 pm
Nangu muteseke ati we re not learned,why all those promises? thats a hot seat mwamonaka? kankonkote u re real.
Bashi Chalwe
November 15, 2011 at 4:41 pm
hahahahahahah….. guys guys guys
ZwaNgendaba
November 15, 2011 at 5:01 pm
Am disappointed by thi guy guy Scott. Workers will not gain k 1 000 000. Tax is a percentum applied on ones income. Under the 2010 budget, a worker with a gross income of k 2000 000 would pay no income tax on the first k 1 000 000 and 25% on the re ain’t income which in this case would be. K 250 000. Under this PF budget this same worker would not pay any PAYE. The worker would not gain k 1000 000 as Scott lies. If fact the PF has increased the tax on the 25% and 30% bands by raising the amounts in these categories. So for workers earning more than k 2000 000 the k250 000 gain would be eroroded by the increase these bands
katongo
November 15, 2011 at 9:19 pm
PF is a bad group of people with lies on them wait and see zambia will suffer a great deal it was wrong to vote for them
Nak
November 15, 2011 at 10:19 pm
@Katongo uli wabufi. What do you mean people will suffer? Ushitashya Mwana wandoshi? I was reading here Bakers wanted to increase the price of bread but the President told them not to. Fuel balibwesha. Paye balibwesha nomba nifinshi ulefwaya?
Brilliant
November 15, 2011 at 11:03 pm
I would love someone to tell me how a Zambia earning a salary of K900,000 will benefit from the new taxation system of the PF government. We will wait to see how more money wll get into people’s pockets especially as we approach the expiry of the 90 days. More U turns and reversals by Sata and his allies!! This is Zambia!!!
chazo
November 28, 2011 at 10:53 pm
this is o rubbish. pipo shud learn to b firm & stand on their grounds not wanabez