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Tuesday, 30 March 2010

Another day, another party, 4th Edition

I forgot to announce the formation of the National Restoration Party (NAREP). We are all tired of course of these new one man parties without any clear understanding that the political space in Zambia does not allow for more than two strong parties at a time.  But all friends of the Zambian Economist should be happy because the NAREP has an interesting weblink : www.newzambia.org . If that looks familiar its because for over three years the Zambian Economist has owned a related weblink www.newzambia.com  which redirects here. Those who have been with us from way back will recall that at one point we used to be called "New Zambia".  All being well then we hope NAREP will become so popular that visitors will start accidentally spilling over to us!  Their prosperity is clearly ours!

Related Posts :
Another day, another party, 3rd Edition
Another day, another party, 2nd Edition
Another day, another party

7 comments:

  1. See my comments here. You know I would love for NAREP to be the real deal, but they are just another neoliberal party. Tow of their points are:

    - a flat tax
    - attracting foreign businesses

    Nowhere do they indicate that they would tax the mines. My deepest suspicion is that this might be a party that is sponsored by the mines to make the PF-UPND eihter lose or win with a smaller margin.

    Why would Zambia need another party that wants to attract foreign investors? Zambia needs a party with enough confidence to develop itself. The money is there (over a billion from the mines is waiting to be taxed), the resources are there (land, people, raw materials).

    All that is needed is a party strong enough to stand up to the mines and take the money.

    ReplyDelete
  2. Mk
    No one is as detached from reality as you are! The balance you don't seem to see is that 'getting that money' may result in getting nothing at all. The simple logic is that no one locally is able to run the mines and as such the involvement of foreign firms.

    The risks associated with mining are such that, a balance sheet is inadquate to explain them. Yes, these foreign firms are making a lot of money which in fact is their core aim but do you want equitty in profit yet without shared risks?

    ReplyDelete
  3. Anonymous cont'd

    The onus is on us as a nation to develop capacity within ourselves to take up the challenges of running such ventures as mining. In the meantime, it is utterly useless to be salivating at the excess profits 'others' are making when in the first place left to ourselves we fail to run the ventures.

    ReplyDelete
  4. 'Anonymous',

    It is you who is 'detached from reality' when you think that somehow the mines don't deserve to be taxed, but the Zambian people should be.

    Right now, it are the Zambian people who are paying for everything.

    To say that the mines paying taxes is 'salivating at the money others are making' is infantile.

    In a society where you enjoy the right to make profits, enjoy the use of public roads, enjoy the availability of an educated work force, you have to pay your share back to the public.

    To think otherwise is to believe that there is such a thing as a free lunch.

    The mines do not have a godgiven right to make profits in Zambia. Working in Zambia for them is a privilege, and that privilege comes at a cost.

    So stop whining about having to pay taxes, and pay up.

    ReplyDelete
  5. Mk
    I really shouldn't be responding but my egoistic nature demands that I do so. Are the mines not paying tax? What of the company tax, loyalty tax. What of the income tax from workers, what of VAT?

    I am sure you understand that employment levels are not just for show but an indicator of valuable govt revenue- income tax.

    Honestly, all this is too basic to point out but my point remains, the chief aim of investors to make money otherwise no need to invest.

    You must understand this I presume. Why couldn't the local firms take up Munali if you understand the point?

    ReplyDelete
  6. 'Anonymous',

    Honestly, all this is too basic to point out but my point remains, the chief aim of investors to make money otherwise no need to invest.

    Which is why the interest of 'investors' is not the same as that of the Zambian people, and why their interests should not determine government policy.

    What of the company tax, loyalty tax. What of the income tax from workers, what of VAT?

    What about it - do you care to quantify those taxes?

    Because this year, even though they make billions of dollars in profits, the foreign owned mines are expected to pay $50 million in taxes.

    So what about all those individual taxes? They don't amount to a hill of beans.

    You must understand this I presume. Why couldn't the local firms take up Munali if you understand the point?

    Because for starters no one is lending them any money. All the money that is going to

    Now let's look at why there is no money, and why commercial banks are charging usurious rates even to people with collateral and established businesses.

    The commercial banks are lending their money to the government which keeps borrowing.

    Now why does the government keep borrowing? Because they only get $1.1 billion from PAYE, and $6 million in taxes from the mines, even though the mines are making $2.4 billion profits from a $4 billion turnover (using 2004 figures).

    This is the destructive effect on the Zambian economy of not taxing the mines.

    And it has to end.

    ReplyDelete
  7. From the comments on this board, I speculate that what is probably occurring are academicians and economists lacking real life work experience in companies. If they did, they would realize that companies operate on the basis of contract law, and that management is accountable to the investors.

    The sequence of events is that for a country to obtain the large amounts of capital necessary to expand economic activity, investors will invest in companies which they believe have the expertise and competency to obtain the returns they desire. The investors also expect the same legal environment and investment protection that developed countries offer. Without these protections, investors will be reluctant to jeopardize their capital by making investments and getting into situations which they did not expect.

    ReplyDelete

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