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Thursday, 15 October 2009

Incomplete advocacy..

The National Union of Miners and Allied Workers (NUMAW) have allegedly "supported calls by the International Monetary Fund (IMF) for government to increase the mineral royalties and corporate taxes in order to increase its revenue". Quite an odd position for a mining union when one considers that higher taxes presumably are not necessarily beneficial to employees. In the absence of stronger legislation, an arbitrary higher tax on mining activities could lead to the mining companies extracting revenues through other means. Most notably through lower wages or spend less on safety or environment pollution. Higher mining taxes are a necessary but insufficient condition for uplifting our people. This is why I continue to advocate for a more holistic approach to the issue - see A Human Approach to the Mining Debate.

8 comments:

  1. Cho,

    "supported calls by the International Monetary Fund (IMF) for government to increase the mineral royalties and corporate taxes in order to increase its revenue". Quite an odd position for a mining union when one considers that higher taxes presumably are not necessarily beneficial to employees.

    I completely disagree. Remember that government revenues now come out of PAYE - which is disproportionately paid by the miners (employees), whereas as corporations, the mining companies pay almost no taxes.

    Corporate and windfall taxes could go to healthcare and education, which miners would benefit from, if fees for both were abolished and paid for by corporate taxes.

    In fact not being pro-corporate and pro-worker is perfectly consistent with a union.

    What I find mysterious is the Finance Minister's protecting the mines from taxation. Check out:

    Non-projection of mining revenue reflects govt’s failure - Simuusa
    Written by Chiwoyu Sinyangwe and Fridah Zinyama
    Thursday, October 15, 2009 5:56:50 PM

    I quote:

    During the presentation of the 2010 national budget, Dr Musokotwane did not announce the projected revenues from the mining sector, a shift from the custom that had become a tradition in the last few years.

    And...

    “But the way I know this government, we are again playing hide and seek. They do not want to be held accountable to any of the high-sounding words about the mining sector.”

    ReplyDelete
  2. MrK,

    I think you are disagreeing with one line rather than an entire argument. My point is that it is illogical for a mining union to support an increase in taxes ONLY. It's not in their interest.

    Your argument actually demonstrates the point. It rests on three things :

    1. Increase mining taxes.

    2. Government reduces PAYE

    3. Government spends the money wisely on services etc

    The mining union in question was only arguing for (1). My point is that is incomplete and may be harmful.

    They should argue for (1) plus "protection",  which could come in the form of your points (2) and (3). My view of course is that the model I propose offers a better framework for achieving that.  

    ReplyDelete
  3. Cho,

    I think we are on the same page. Maybe the mines are just taking it one step at a time.

    Maybe they find it easier to back the IMF first and only later directly criticize the government.

    ReplyDelete
  4. Indeed.

    The mining companies fund these political parties.

    I have no tangible proof but having read Chiluba's testimony and LPM's biography, its clear the parties rely on "foreign funding" to survive.

    Party funding in Zambia is unregulated. So we know that ANYONE can fund ANYONE.

    My guess is that the USUAL SUSPECTS with an interest in ZAMBIA's MINERAL WEALTH also fund ZAMBIA's MAIN POLITICAL PARTIES.

    A task perhaps for a serious investigative journalist to look into..

    ReplyDelete
  5. Cho,

    The mining companies fund these political parties.

    That implies that they will never be taxed, as long as they are in private hands. And we know they already never properly declare their profits.

    And that implies that they should be nationalized. And without foreign funding, government would be a lot more responsive to the people.

    Systemic corporate capture of the government would explain a lot of things. That goes way beyond individual bribes.

    ReplyDelete
  6. Conspiracies began!

    ReplyDelete
  7. And by the way, this is a global phenomenon. Look at the corporate capture of the US senate and congress. The majority of the population is strongly in favour of not only a 'public option', but single payer healthcare. But they won't get it, because of the power of the health insurance industry, and the money it has paid to senators and congressmen.

    Why wouldn't the mines have done the same thing for Zambian politicians?

    If this is the corporate method of operations, why would Zambia or any other country be different?

    The solution would be to 1) tax the mines and 2) publicly fund political parties, and make any private donation illegal.

    Anonymous,

    Conspiracies began!

    If you mean - let the conspiracy theories begin, perhaps you can show that this is a conspiracy theory, and that it is not true?

    ReplyDelete
  8. The mining companies fund these political parties.

    I have no tangible proof but having read Chiluba's testimony and LPM's biography, its clear the parties rely on "foreign funding" to survive.


    It would be interesting to question disgruntled former party members about the details of payments which corporations back which party.

    Also, if in future elections were publicly funded, perhaps that could be done through a 'Democracy Tax' on foreign corporations - for the privilege of doing business in a democratic country.

    ReplyDelete

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