This Day (Lagos)
24 August 2007
President Umaru Musa Yar'Adua has directed that the issuance of waivers, exemptions from taxes, duties and tariffs to individuals, companies or organisations, be suspended with effect from yesterday. The Federal Government also said it would submit the draft 2008 Budget to the National Assembly by October 8, 2007 and came out with a new approach to fast track the budget process. Also yesterday, the Finance Minister, Dr. Shamsuddeen Usman, and his junior colleague at the ministry, Mr. Remi Babalola, made their asset declarations public, blazing the trail for the other ministers. Speaking at a Ministerial Press Briefing tagged "The New Road Map to Economic Reforms", Usman said the suspension became necessary to plug a number of revenue leakages through which corruption was perpetrated in the last three years. Noting that the amount of waivers given so far was alarming, he pointed out that "the Comptroller-General of Customs told us that one particular waiver was granted ten times over." He added that "a lot of state governments, private sector operators and churches were being granted indiscriminately. Somebody was organising a game and was asking for waivers to import 600 cars." THISDAY gathered that about N235billion that should have accrued to the Federal Government was lost to duty waivers alone in the last five years. According to information from the Ministry of Finance, the losses from waivers and exemptions from import duty, Ecowas Trade Liberalisation Scheme (ETLS), Negotiable Duty Credit Certificates (NDCC), Manufacturing-In-Bond-Scheme and special incentive granted to importers and exporters. About N194.3 billion was lost between 2003 and 2006 with additional N40 billion granted as duty waivers between January and August 2007 A breakdown revealed that, the Federal Government lost N12.394 billion to duty waivers and concessions in 2003, N55.796 billion in 2004, N71.244billion in 2005, and N54.921 in 2006. Going forward, he said, the Yar'Adua has approved the appointment of accounting firms to audit all the existing waivers and exemptions with a view to ascertain their validity and the level of compliance with the rules guiding the granting of such waivers. He urged all beneficiaries of the waivers and exemptions to respond promptly to the call by the appointed accounting firms, when the public announcement is made soon. Efforts, he added, would also be made to improve tax collections. Stressing that "there will be continued reform of the Nigerian tax system in order to ensure that it is at par with the best in the world," Usman said "a number of specific and general reform measures will be adopted. Efforts will continue also, to get the National Assembly to encapsulate such reforms by reviewing existing legislation or enacting new ones, where such legislation is not existent." He further stated that steps were being taken also to improve the coordination between the FIRS and the relevant Departments of the Ministry, especially the Revenue and Fiscal Departments. "This will help to avoid the seeming confusion where one arm of the Ministry is taking some fundamental action that has great potential to embarrass, not only the Ministry alone but the Federal Government as a whole, without the other arm even knowing about it. Such recent, uncoordinated actions include the increase in the VAT, from 5% to 10%, which had to be reversed, and the frequent waivers and tax exemptions being granted, of which we say more below," he said. Other important strategic issues, according to him, included, "the need for a central agency for tax collection; improving the structure and administration of the property tax in Nigeria; review of the VAT, in line with Ecowas protocols and the need for an overall, simpler tax structure for Nigeria." Also, Usman said the NCS would receive great attention, in order to reform it for greater efficiency and accountability, assuring that, the reform agenda currently being pursued by the NCS will be reviewed and overhauled. In addition, Usman stated that another critical area that required urgent attention was the submission of both 2007 Revised Budget and the proposed 2008 Budget to the National assembly Recalling that the 2007 Budget had to be reviewed mainly because of the implementation of the consolidated salary structure by the executive by the Executive, the Judiciary and the legislature. He said two bills namely the 2007 Budget Amendment Bill and 2007 Supplementary Appropriation Bill, have been forwarded by Yar'Adua for consideration and approval by the National Assembly. The finance minister added, as these were being submitted, work on the 2008 Federal Government Budget was at an advanced stage. This, he said, was in spite of the fact that the work on the budget started five months behind that of the 2007 Budget, "due to the change of administration and the late appointment of ministers."
Friday, August 24, 2007
Africa: Pope's New Encyclical to Declare Tax Evasion Socially Unjust
Catholic Information Service for Africa (Nairobi)
14 August 2007
Pope Benedict XVI is working on his second doctrinal pronouncement that will condemn tax evasion as "socially unjust", according to Vatican sources. The pontiff will denounce the use of "tax havens" and offshore bank accounts by wealthy individuals, since this reduces tax revenues for the benefit of society as a whole, The Times Online reports. The new encyclical will focus on humanity's social and economic problems in an era of globalisation. Pope Benedict intends to argue for a world trade and economic system "regulated in such a way as to avoid further injustice and discrimination", said Ignazio Ingrao, a Vatican watcher. The encyclical, drafted during his recent holiday in the mountains of northern Italy, takes its cue from Pope Paul VI's encyclical Populorum Progressio (On the Development of Peoples), issued 40 years ago. Paul VI focused on "those peoples who are striving to escape from hunger, misery, endemic diseases and ignorance and are looking for a wider share in the benefits of civilisation". He called on the West to promote an equitable world economic system based on social justice rather than profit.
14 August 2007
Pope Benedict XVI is working on his second doctrinal pronouncement that will condemn tax evasion as "socially unjust", according to Vatican sources. The pontiff will denounce the use of "tax havens" and offshore bank accounts by wealthy individuals, since this reduces tax revenues for the benefit of society as a whole, The Times Online reports. The new encyclical will focus on humanity's social and economic problems in an era of globalisation. Pope Benedict intends to argue for a world trade and economic system "regulated in such a way as to avoid further injustice and discrimination", said Ignazio Ingrao, a Vatican watcher. The encyclical, drafted during his recent holiday in the mountains of northern Italy, takes its cue from Pope Paul VI's encyclical Populorum Progressio (On the Development of Peoples), issued 40 years ago. Paul VI focused on "those peoples who are striving to escape from hunger, misery, endemic diseases and ignorance and are looking for a wider share in the benefits of civilisation". He called on the West to promote an equitable world economic system based on social justice rather than profit.
Wednesday, August 15, 2007
South Africa: Experts Say Tax Incentives Don't Pull Investment
15th August 2007(Business Daily)
THE suggestion by one of SA's leading tax experts, that the granting of tax incentives for purposes of foreign direct investment is "fundamentally bad" has raised eyebrows in both business and labour sectors. Edward Nathan Sonnenbergs chairman Michael Katz, said last night that tax incentives "result in a misallocation of resources and drive up the country's corporate tax rates". Katz was part of a panel of speakers at a business conference held by accounting firm Grant Thornton. Katz said tax incentives can potentially drive up the country's corporate tax rates and can "lead to an increase in tax administration and tax compliance". "It is a far more viable option to have a lower corporate tax rate than to have tax concessions in place," he said. However, Congress of South African Trade Unions spokesman Patrick Craven said yesterday that although tax incentives are not a solution to SA's poverty, they do have a role to play in foreign direct investment and the creation of jobs. "Tax concessions are relevant for the economy; and not only to the foreign company that is investing the money ." Bill Lacey, a consultant to the South African Chamber of Business , said there had been a lot of interest recently in the idea that tax concessions be re-examined. "It seems tax incentives are back on the radar screen again," Lacey said. However, business is divided on the matter; some are in favour of incentives and others against them, he said. "The argument against tax concessions is that someone also has to pass the buck. Usually it is large business," Lacey said. Katz said the granting of tax concessions leads to an increase in compliance administration. Groups have to determine whether they fall within the concession, he said. This leads to opinions, further monitoring and administration. "The fiscus is spending unnecessary money and the taxpayer is having to fork out the costs." The government recently announced plans to bring back a popular industrial tax incentive, the Strategic Investment Programme (SIP), which was scrapped two years ago for not addressing the high unemployment rate. The new SIP is set to target downstream economic activity in the pharmaceutical, capital equipment, and transport sectors. Des Kruger a director at commercial law firm Mallinicks Attorneys, said the most common mistake a country can make is to rely on tax incentives to attract foreign investment. Several studies have shown that tax incentives are totally ineffective in attracting investment for the domestic market and have a small effect on export manufacturers, Kruger said.
THE suggestion by one of SA's leading tax experts, that the granting of tax incentives for purposes of foreign direct investment is "fundamentally bad" has raised eyebrows in both business and labour sectors. Edward Nathan Sonnenbergs chairman Michael Katz, said last night that tax incentives "result in a misallocation of resources and drive up the country's corporate tax rates". Katz was part of a panel of speakers at a business conference held by accounting firm Grant Thornton. Katz said tax incentives can potentially drive up the country's corporate tax rates and can "lead to an increase in tax administration and tax compliance". "It is a far more viable option to have a lower corporate tax rate than to have tax concessions in place," he said. However, Congress of South African Trade Unions spokesman Patrick Craven said yesterday that although tax incentives are not a solution to SA's poverty, they do have a role to play in foreign direct investment and the creation of jobs. "Tax concessions are relevant for the economy; and not only to the foreign company that is investing the money ." Bill Lacey, a consultant to the South African Chamber of Business , said there had been a lot of interest recently in the idea that tax concessions be re-examined. "It seems tax incentives are back on the radar screen again," Lacey said. However, business is divided on the matter; some are in favour of incentives and others against them, he said. "The argument against tax concessions is that someone also has to pass the buck. Usually it is large business," Lacey said. Katz said the granting of tax concessions leads to an increase in compliance administration. Groups have to determine whether they fall within the concession, he said. This leads to opinions, further monitoring and administration. "The fiscus is spending unnecessary money and the taxpayer is having to fork out the costs." The government recently announced plans to bring back a popular industrial tax incentive, the Strategic Investment Programme (SIP), which was scrapped two years ago for not addressing the high unemployment rate. The new SIP is set to target downstream economic activity in the pharmaceutical, capital equipment, and transport sectors. Des Kruger a director at commercial law firm Mallinicks Attorneys, said the most common mistake a country can make is to rely on tax incentives to attract foreign investment. Several studies have shown that tax incentives are totally ineffective in attracting investment for the domestic market and have a small effect on export manufacturers, Kruger said.
Sh200bn lost in tax waivers and evasion
(Business Daily Africa)-15th August 2007
Treasury's public finance reform unit says there is a high level of tax evasion and too many waivers that reduce government revenue.
Although a detailed study is yet to be done, tax experts have estimated that it is possible to collect Sh600 billion or 50 per cent more tax, than is currently the case. The 2006/7 collections were Sh376 billion, but Treasury expects to get Sh429 billion in the 2007/8 fiscal year, which is about 21 per cent of the gross domestic product.
Uganda collects about 23 per cent of its GDP, while a middle income countries such as Greece has been know to collect up to 45 per cent of its GDP.
It has also emerged that not enough efforts have been put towards ensuring that non-tax revenue is collected. The little collected is not even remitted to the Treasury and may be ending up lining individuals' pockets.
Although Finance minister Amos Kimunya thanked Kenyans for paying tax when he presented the Budget in June, concern has emerged over actual potential of revenue collection as Treasury embarks on reforms under the Public Financial Management (PFM) programme.
A paper on the constraints to better PFM says: "Diagnostic studies have revealed that there is a high level of tax evasion and waivers. In addition, the level of efforts to collect non-tax revenue is low and revenue collected is sometimes not remitted to Treasury, leading to excess and hidden expenditure."
An attempt by Business Daily to get a response from the Kenya Revenue Authority was unsuccessful. KRA is headed by Commissioner General Michael Waweru.
However, tax expert Paulino Mutegi of Ernst & Young says that even GDP figure must be lower than the actual production in Kenya, indicating that a much higher level of tax is possible.
"I cannot say for sure how much more can be collected, but the potential is great. Many people don't pay tax on income from buildings they own and the jua kali sector largely goes untaxed," Mr Mutegi said. He urged the government to have a friendly tax regime, adding that many people who are currently not paying tax would end up paying voluntarily.
He said many farming activities as well as those in the informal sector were not captured in the GDP. Total revenues, including appropriations-in-aid, are projected to increase by about 14 per cent, bringing the total tax collection to about Sh428.8billion.
The state believes that the improved performance is underpinned by on-going reforms in tax administration, while the streamlining of the exemptions regime in line with other East African Community partner states is also expected to protect the revenue base. But critics have pointed out that revenues can exceed Sh600 billion if tax administration as well as the capacity of KRA were improved.
Tax evasion problem In sub-Sahran Africa, revenue to GDP ratio is below 20 per cent, showing that Kenya is among the highest in the region.
However, in a country like Greece, the ration was 46.5 per cent in 2003. In Uganda, the ratio is about 22 to 23 per cent, yet the country has less than half the size of Kenya's economy. Thus it is possible for Kenya to get at least 30 per cent of GDP in revenue if stringent measures were to be effected.
The tax evasion problem is not unique to Kenya. The Tanzanian Revenue Authority is currently facing a daunting task because the revenue to GDP ratio, at below 15 per cent, remains significantly below the average for Sub-Saharan Africa.
The paper by PFM further shows that Kenya's financial management system suffers also because budget disbursements are unpredictable as payments can be delayed resulting in high arrears. "Cash management and commitment is still poor," says the report.
It notes that the variance between the annual budget and the final expenditure outcome is high. Mr Kimunya recently said the finances needed to be streamlined to ensure that resources allocated were actually spent rather than returned to Treasury as is the case from year to year.
"Parliament's, line ministries and district level involvement in the budget process is low and the process delayed. Budget allocations do not adequately address poverty alleviation," the report said.
Treasury's public finance reform unit says there is a high level of tax evasion and too many waivers that reduce government revenue.
Although a detailed study is yet to be done, tax experts have estimated that it is possible to collect Sh600 billion or 50 per cent more tax, than is currently the case. The 2006/7 collections were Sh376 billion, but Treasury expects to get Sh429 billion in the 2007/8 fiscal year, which is about 21 per cent of the gross domestic product.
Uganda collects about 23 per cent of its GDP, while a middle income countries such as Greece has been know to collect up to 45 per cent of its GDP.
It has also emerged that not enough efforts have been put towards ensuring that non-tax revenue is collected. The little collected is not even remitted to the Treasury and may be ending up lining individuals' pockets.
Although Finance minister Amos Kimunya thanked Kenyans for paying tax when he presented the Budget in June, concern has emerged over actual potential of revenue collection as Treasury embarks on reforms under the Public Financial Management (PFM) programme.
A paper on the constraints to better PFM says: "Diagnostic studies have revealed that there is a high level of tax evasion and waivers. In addition, the level of efforts to collect non-tax revenue is low and revenue collected is sometimes not remitted to Treasury, leading to excess and hidden expenditure."
An attempt by Business Daily to get a response from the Kenya Revenue Authority was unsuccessful. KRA is headed by Commissioner General Michael Waweru.
However, tax expert Paulino Mutegi of Ernst & Young says that even GDP figure must be lower than the actual production in Kenya, indicating that a much higher level of tax is possible.
"I cannot say for sure how much more can be collected, but the potential is great. Many people don't pay tax on income from buildings they own and the jua kali sector largely goes untaxed," Mr Mutegi said. He urged the government to have a friendly tax regime, adding that many people who are currently not paying tax would end up paying voluntarily.
He said many farming activities as well as those in the informal sector were not captured in the GDP. Total revenues, including appropriations-in-aid, are projected to increase by about 14 per cent, bringing the total tax collection to about Sh428.8billion.
The state believes that the improved performance is underpinned by on-going reforms in tax administration, while the streamlining of the exemptions regime in line with other East African Community partner states is also expected to protect the revenue base. But critics have pointed out that revenues can exceed Sh600 billion if tax administration as well as the capacity of KRA were improved.
Tax evasion problem In sub-Sahran Africa, revenue to GDP ratio is below 20 per cent, showing that Kenya is among the highest in the region.
However, in a country like Greece, the ration was 46.5 per cent in 2003. In Uganda, the ratio is about 22 to 23 per cent, yet the country has less than half the size of Kenya's economy. Thus it is possible for Kenya to get at least 30 per cent of GDP in revenue if stringent measures were to be effected.
The tax evasion problem is not unique to Kenya. The Tanzanian Revenue Authority is currently facing a daunting task because the revenue to GDP ratio, at below 15 per cent, remains significantly below the average for Sub-Saharan Africa.
The paper by PFM further shows that Kenya's financial management system suffers also because budget disbursements are unpredictable as payments can be delayed resulting in high arrears. "Cash management and commitment is still poor," says the report.
It notes that the variance between the annual budget and the final expenditure outcome is high. Mr Kimunya recently said the finances needed to be streamlined to ensure that resources allocated were actually spent rather than returned to Treasury as is the case from year to year.
"Parliament's, line ministries and district level involvement in the budget process is low and the process delayed. Budget allocations do not adequately address poverty alleviation," the report said.
Monday, August 13, 2007
Kenya: Challenges of Collecting Tax across Countries
13th August 2007 (East African Standard)
In many developing countries, multinational corporations hold a large swathe of the economy - agriculture, manufacturing and tourism being the most visible.
In Kenya, for example, foreign multinationals dominate agriculture, especially horticulture. There is much debate between those who consider globalisation to be a malignant influence on poor nations and those who find it a positive force.
The debate focuses not just on trade, but also on multinational corporations. And one of the most controversial but least understood of a multinational's operations is transfer pricing. This governs transactions among divisions in a company.
For a company operating in a single tax jurisdiction, transfer prices track internal transactions and allocate costs to different activities. In this case, transfer prices are mainly used to evaluate division managers' performance based on profits generated.
They also help coordinate the divisions' decisions to achieve the organisation's goals to ensure goal congruence, make decisions and preserve autonomy. However, for a multinational company with affiliates in different tax jurisdictions, transfer prices serve more than tracking internal transactions for accounting purposes.
They determine tax liabilities of the affiliates in different countries, and hence the liability of the entire multinational. When a part of a multinational organisation in one country sells goods, services or know-how to another part in another country, the price charged is called 'transfer price'.
This may be a purely arbitrary figure, and may be unrelated to costs incurred or operations. Internationally accepted transfer pricing provisions require any income from an international transaction between two or more associated enterprises to be at arm's length price and be comparable to similar transactions among unrelated enterprises.
This means that a company must be able to demonstrate that the price at which it trades with affiliated companies is comparable to the prices and terms that would prevail in similar transactions among unrelated parties.
As inter-company transactions across borders keep growing and becoming more complex, compliance with the requirements of multiple overlapping tax jurisdictions is becoming a complicated and time-consuming task.
At the same time, tax authorities in each country impose strict penalties, new documentation requirements, increased information exchange and audit or inspection.
One of the major arguments against transfer pricing is that it and tax havens, individually and in combination, adversely affect the ability to raise revenues. Research has shown that in some instances, increasing the arbitrary transfer price boosts a multinational's after-tax profit.
This is done without changes to procedures, operations or added value, but by mere change of book entries. Increased profitability arises from tax avoidance. In other words, it is possible for a multinational company to minimise its liability for corporation tax by transfer pricing.
This is legal unless a jurisdiction legislates to prevent the practice. In principle, all income that crosses international borders could be taxed by the country where it originates (the source country) or by the country of residence of the recipients - the home country.
If the two countries taxed such income, double taxation would occur. To forestall this, domestic laws and bilateral tax treaties have provisions to prevent this. Treaties also provide for exchange of information between tax administrators of source and residence countries.
Most treaties among developed countries are based on the OECD Model Treaty. Those between developing countries are more likely to follow the UN Model Treaty, generally more favourable to source countries.
Under the treaties, income is taxed depending on how it is characterised. Source countries ordinarily tax net business income, but only if it is earned by a 'permanent establishment' in the country. By comparison, source countries tax interest, dividends and royalties, if at all, on a gross basis (without regard to deductions for expenses of earning the income), commonly via withholding taxes.
The taxes are generally reduced, sometimes to zero, under treaties. In some jurisdictions, if a company or a branch did not transact business 'at-arm's-length', tax authorities can add to its taxable basis the advantage granted to an affiliated company; or challenge the deductibility of tax losses.
In practice, whether a company has engaged in improper transfer pricing depends on the circumstances of the transaction. Despite the general requirement of 'at-arm's-length', various jurisdictions have in some cases been willing to accept that companies of the same group may interact with one another in a way that independent parties would not.
Developing nations face several layers of overwhelming problems in transfer pricing. Laws may not deal adequately with the issue. The UN reports that transfer pricing regulations, guidelines and administrative requirements of 41 per cent of developing countries do not address services and regulations of two-thirds do not address technology transfers.
Even where laws for monitoring transfer pricing exists, a developing nation may lack the administrative capacity, including specially trained economists, to deal with the problem.
The writer is a business analyst with The Standard Group
In many developing countries, multinational corporations hold a large swathe of the economy - agriculture, manufacturing and tourism being the most visible.
In Kenya, for example, foreign multinationals dominate agriculture, especially horticulture. There is much debate between those who consider globalisation to be a malignant influence on poor nations and those who find it a positive force.
The debate focuses not just on trade, but also on multinational corporations. And one of the most controversial but least understood of a multinational's operations is transfer pricing. This governs transactions among divisions in a company.
For a company operating in a single tax jurisdiction, transfer prices track internal transactions and allocate costs to different activities. In this case, transfer prices are mainly used to evaluate division managers' performance based on profits generated.
They also help coordinate the divisions' decisions to achieve the organisation's goals to ensure goal congruence, make decisions and preserve autonomy. However, for a multinational company with affiliates in different tax jurisdictions, transfer prices serve more than tracking internal transactions for accounting purposes.
They determine tax liabilities of the affiliates in different countries, and hence the liability of the entire multinational. When a part of a multinational organisation in one country sells goods, services or know-how to another part in another country, the price charged is called 'transfer price'.
This may be a purely arbitrary figure, and may be unrelated to costs incurred or operations. Internationally accepted transfer pricing provisions require any income from an international transaction between two or more associated enterprises to be at arm's length price and be comparable to similar transactions among unrelated enterprises.
This means that a company must be able to demonstrate that the price at which it trades with affiliated companies is comparable to the prices and terms that would prevail in similar transactions among unrelated parties.
As inter-company transactions across borders keep growing and becoming more complex, compliance with the requirements of multiple overlapping tax jurisdictions is becoming a complicated and time-consuming task.
At the same time, tax authorities in each country impose strict penalties, new documentation requirements, increased information exchange and audit or inspection.
One of the major arguments against transfer pricing is that it and tax havens, individually and in combination, adversely affect the ability to raise revenues. Research has shown that in some instances, increasing the arbitrary transfer price boosts a multinational's after-tax profit.
This is done without changes to procedures, operations or added value, but by mere change of book entries. Increased profitability arises from tax avoidance. In other words, it is possible for a multinational company to minimise its liability for corporation tax by transfer pricing.
This is legal unless a jurisdiction legislates to prevent the practice. In principle, all income that crosses international borders could be taxed by the country where it originates (the source country) or by the country of residence of the recipients - the home country.
If the two countries taxed such income, double taxation would occur. To forestall this, domestic laws and bilateral tax treaties have provisions to prevent this. Treaties also provide for exchange of information between tax administrators of source and residence countries.
Most treaties among developed countries are based on the OECD Model Treaty. Those between developing countries are more likely to follow the UN Model Treaty, generally more favourable to source countries.
Under the treaties, income is taxed depending on how it is characterised. Source countries ordinarily tax net business income, but only if it is earned by a 'permanent establishment' in the country. By comparison, source countries tax interest, dividends and royalties, if at all, on a gross basis (without regard to deductions for expenses of earning the income), commonly via withholding taxes.
The taxes are generally reduced, sometimes to zero, under treaties. In some jurisdictions, if a company or a branch did not transact business 'at-arm's-length', tax authorities can add to its taxable basis the advantage granted to an affiliated company; or challenge the deductibility of tax losses.
In practice, whether a company has engaged in improper transfer pricing depends on the circumstances of the transaction. Despite the general requirement of 'at-arm's-length', various jurisdictions have in some cases been willing to accept that companies of the same group may interact with one another in a way that independent parties would not.
Developing nations face several layers of overwhelming problems in transfer pricing. Laws may not deal adequately with the issue. The UN reports that transfer pricing regulations, guidelines and administrative requirements of 41 per cent of developing countries do not address services and regulations of two-thirds do not address technology transfers.
Even where laws for monitoring transfer pricing exists, a developing nation may lack the administrative capacity, including specially trained economists, to deal with the problem.
The writer is a business analyst with The Standard Group
Sunday, August 12, 2007
Zambia: Government Lost Out K93 Billion in Tax Concessions
(The Times of Zambia) 12th August 2007
PARLIAMENT yesterday heard that the Government lost K93.78 billion as a result of various tax concessions in the period January to December last year. Finance and National Planning deputy Minister Jonas Shakafuswa said in response to a question from Gwembe MP Brian Ntundu (UPND) who wanted to know how many foreign investors or companies enjoyed tax concessions and how much revenue the Government had lost as a result. Mr Shakafuswa said what should be realised is that concessions were not only offered to foreign investors but also applied to local companies undertaking activities for which tax concessions were given. He explained that nine companies were enjoying concessions under income tax and most of these were in the mining sector. The companies that enjoyed tax concession were First Quantum Mining and Operations, Konkola Copper Mines, Chambeshi Metals, Luanshya Copper Mines, Chibuluma Mines and Kansanshi Mines. The rest that benefited from the concessions were Non-Ferrors Corporation (NFC) African Mining, Mopani Copper Mines and Lumwana Copper Mines. "These companies enjoyed concessions in form of company tax rate of 25 per cent instead of the general company tax rate of 35 per cent. "They also enjoyed concessions in the form of mineral royalty rate of 0.6per cent instead of the general rate of two per cent, which was revised to three per cent in 2007 budget," Mr Shakafuswa said. He also said that in terms of trade related tax concessions over 800 both local and foreign companies were benefitting. Mr Shakafuswa also said 16 companies were currently listed on the Lusaka Stock Exchange (LuSE). He was responding to a question by Mr Ntundu who wanted to know the number of companies listed on the Lusaka Stock Exchange. Mr Shakafuswa also said the nation would be informed on the status of Celtel as regards the listing of shares on the market. He was responding to a question by Chisamba MP Moses Muteteka (MMD) who wanted to know when Celtel would truly list its shares on the market so that Zambians could acquire some. Mines and Minerals development Deputy Minister Maxwell Mwale told the House that Chambishi Copper Smelter would be completed by December 2008 and US$300 million had been spent on the construction of the smelter. He said the company was currently employing 469 members of staff on renewable contracts and once completed 1,500 people were expected to be employed. Mr Mwale was responding to a question by Chipili MP Davies Mwila (PF) who wanted to know when the smelter would be completed and the number of people employed He also disclosed that 260 Chinese were employed at the firm.
PARLIAMENT yesterday heard that the Government lost K93.78 billion as a result of various tax concessions in the period January to December last year. Finance and National Planning deputy Minister Jonas Shakafuswa said in response to a question from Gwembe MP Brian Ntundu (UPND) who wanted to know how many foreign investors or companies enjoyed tax concessions and how much revenue the Government had lost as a result. Mr Shakafuswa said what should be realised is that concessions were not only offered to foreign investors but also applied to local companies undertaking activities for which tax concessions were given. He explained that nine companies were enjoying concessions under income tax and most of these were in the mining sector. The companies that enjoyed tax concession were First Quantum Mining and Operations, Konkola Copper Mines, Chambeshi Metals, Luanshya Copper Mines, Chibuluma Mines and Kansanshi Mines. The rest that benefited from the concessions were Non-Ferrors Corporation (NFC) African Mining, Mopani Copper Mines and Lumwana Copper Mines. "These companies enjoyed concessions in form of company tax rate of 25 per cent instead of the general company tax rate of 35 per cent. "They also enjoyed concessions in the form of mineral royalty rate of 0.6per cent instead of the general rate of two per cent, which was revised to three per cent in 2007 budget," Mr Shakafuswa said. He also said that in terms of trade related tax concessions over 800 both local and foreign companies were benefitting. Mr Shakafuswa also said 16 companies were currently listed on the Lusaka Stock Exchange (LuSE). He was responding to a question by Mr Ntundu who wanted to know the number of companies listed on the Lusaka Stock Exchange. Mr Shakafuswa also said the nation would be informed on the status of Celtel as regards the listing of shares on the market. He was responding to a question by Chisamba MP Moses Muteteka (MMD) who wanted to know when Celtel would truly list its shares on the market so that Zambians could acquire some. Mines and Minerals development Deputy Minister Maxwell Mwale told the House that Chambishi Copper Smelter would be completed by December 2008 and US$300 million had been spent on the construction of the smelter. He said the company was currently employing 469 members of staff on renewable contracts and once completed 1,500 people were expected to be employed. Mr Mwale was responding to a question by Chipili MP Davies Mwila (PF) who wanted to know when the smelter would be completed and the number of people employed He also disclosed that 260 Chinese were employed at the firm.
Monday, August 6, 2007
Kenya: Now Students Ask Leaders to Pay Tax
6th August 2007 (Daily Nation)
Youngsters participating in this year's schools and colleges music festival
have asked MPs to pay taxes and support free primary education.
The leaders who have been criticised for an attempt to award themselves huge
benefits, were advised to fight tax evaders.
According to the students, the country would not need foreign aid if all
Kenyans promptly paid their taxes.
"We are talking about promoting positive behaviour change among Kenyans with
regard to payment of taxes, and to remind Kenyans to pay taxes to enhance
our economic independence," said one of the students.
Health facilities
The category was sponsored by the Kenya Revenue Authority.
In their choral verse, We Demand, Kangubiri Girls Secondary said more tax
revenue had increased supply of drugs to public hospitals.
However, they called for the setting up of more health facilities to serve
young people. "Politicians could do better than always safari ya ng'ambo
(Overseas trips). Payment of taxes could save these problems' said Faith
Githinji, a presenter.
A teacher, Mr Johnson Wanyaguthii, said most Kenyans had a negative attitude
towards payment of taxes and asked the students to step up their campaign
against evaders.
Eight categories of music and poetry were performed in the category at Lions
Primary schools, Menengai High and Melvin Jones. The category attracted a
total of 3,750 students.
Nairobi Aviation College thrilled the audience with their song Lipa Ushuru
(Pay Tax) during the family show.
Winners in the KRA category included: Rongo Success from Nyanza, St Marys
Girls (Rift Valley), Webuye DEB (Western), Carol Academy (Rift Valley),
Golden Elites (Nyanza), Nzoia Sugar (Western), Star of the Sea (Coast),
Kevee Girls and Kipsangui Girls High of Western Province.
Educate country
The authority was commended for sponsoring the presentations aimed at
educating the country on tax payment.
"We should be both economically and political independent and cases of
working under unrealistic conditions by donors would be a thing of the
past," said judge Dan Otiende.
Students of colleges and technical training institutes arrived yesterday
ready for their presentations starting today.
The 10-day festival featuring primary and secondary schools, teachers'
training colleges and universities ends on Thursday with a finalists'
concert sponsored by the Nation Media Group.
Youngsters participating in this year's schools and colleges music festival
have asked MPs to pay taxes and support free primary education.
The leaders who have been criticised for an attempt to award themselves huge
benefits, were advised to fight tax evaders.
According to the students, the country would not need foreign aid if all
Kenyans promptly paid their taxes.
"We are talking about promoting positive behaviour change among Kenyans with
regard to payment of taxes, and to remind Kenyans to pay taxes to enhance
our economic independence," said one of the students.
Health facilities
The category was sponsored by the Kenya Revenue Authority.
In their choral verse, We Demand, Kangubiri Girls Secondary said more tax
revenue had increased supply of drugs to public hospitals.
However, they called for the setting up of more health facilities to serve
young people. "Politicians could do better than always safari ya ng'ambo
(Overseas trips). Payment of taxes could save these problems' said Faith
Githinji, a presenter.
A teacher, Mr Johnson Wanyaguthii, said most Kenyans had a negative attitude
towards payment of taxes and asked the students to step up their campaign
against evaders.
Eight categories of music and poetry were performed in the category at Lions
Primary schools, Menengai High and Melvin Jones. The category attracted a
total of 3,750 students.
Nairobi Aviation College thrilled the audience with their song Lipa Ushuru
(Pay Tax) during the family show.
Winners in the KRA category included: Rongo Success from Nyanza, St Marys
Girls (Rift Valley), Webuye DEB (Western), Carol Academy (Rift Valley),
Golden Elites (Nyanza), Nzoia Sugar (Western), Star of the Sea (Coast),
Kevee Girls and Kipsangui Girls High of Western Province.
Educate country
The authority was commended for sponsoring the presentations aimed at
educating the country on tax payment.
"We should be both economically and political independent and cases of
working under unrealistic conditions by donors would be a thing of the
past," said judge Dan Otiende.
Students of colleges and technical training institutes arrived yesterday
ready for their presentations starting today.
The 10-day festival featuring primary and secondary schools, teachers'
training colleges and universities ends on Thursday with a finalists'
concert sponsored by the Nation Media Group.
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