BUUMBA CHIMBULU [email protected]
STAKEHOLDERS expect tough decisions such as cutting down of taxes and putting place a clear debt redemption strategy among others, to be made in the 2021 national budget presentation while practicing pragmatic leadership which will stimulate the economy.
Finance Minister, Bwalya Ng’andu, today has a tough time to present one of the country’s most difficult national budget in history.Cutting down taxes in the short term will help to stimulate the economy, says PwC Zambia Director, tax services, Lydia Pwadura.Ms Pwadura warned that Government would be run a risk of bringing the economy to a halt if the current tax measures were maintained.She was speaking this week during the PwC’s 2021 Pre-budget webcast: A private sector view meeting.“This will be the toughest budget for the minister, we expect stimulus package to help businesses recover.“It will be very important to focus on supporting measures to stimulate the economy, this will help struggling businesses to recover and possibly attract new investment,” Ms Pwadura said.She suggested the consideration of allowing tax refunds and offsets as this would be a win-win situation for both industry players and Government.Ms Pwadura explained that there would be pressure on the treasury to pay tax refunds which would lead to taxpayer’s cashflow problems.“The Minister can kill two by allowing offsets by allowing from the treasury, there will be no cash moving from the treasury. Zambia can learn something from Kenya who have taken a similar position,” she said.Union Gold Group of Companies Zambia Chairman, Mark O’Donnell, said the current tax system was outdated for a growing economy.Mr O’Donnell said Zambia needed a tax system for a modern growing economy.“The current tax system is out of date, it is not for a modern growing economy, we need tax reforms that puts in place and meets the needs of a growing economy. We need to reorganise the economy,” he said.Economics Association of Zambia (EAZ) National Secretary, Mutisunge Zulu, stressed the need to focus on putting in place a clear debt redemption strategy that spoke to debt sustainability.Mr Zulu emphasised that transparency was key when any economy was facing fiscal challenges.“I would want to have a very clear debt redemption to send positive message to the market community. It will be very critical time for pragmatic leadership and not theory by listening to the private sector,” he said.Zambia Chamber of Mines president, Goodwell Mateyo, called for a conducive environment to attract investment from cheap capital resulting from stimulus packages being given from around the world.
PwC South Africa partner, Lullu Kragel said: “Tough decisions will have to be made during the 2021 national budget. Immediate things that needs to be done, focus on to rebuild the economy.”