Fuel levies and Taxes

It is not fair for Government to continue berating and demonizing individuals and students that have spoken out against the increase in fuel prices.

The Government must simply own up and admit the need for additional revenue to meet the inevitable budget overruns as a result of the huge salary award, additional by elections, new Districts and a host of other unplanned expenditure.

The oil price increase has nothing to do with development; it has everything to do with generating additional revenue for the Government through levies and taxes.

The Government has found oil as the most readily available and easily collectable source of hard cash to cover the various unplanned costs. 

It is disingenuous for Patriotic Front Secretary General Wynter Kabimba to suggest that budget cost overruns will be covered by supplementary allocations. These mean real money collected from real people who are protesting. There is nothing magical about supplementary allocations. Idi Amin was perhaps more ingenious when he suggested that the Central Bank should simply print more money to meet budget overruns.

Salaries must be paid in cash, which in this case will come from the additional collections from revenue which the ordinary Zambian will pay through higher bus fares and more expensive goods and services. This is cruel and unfair to the poor.

It is a fact that Zambia has the most expensive oil in the region and yet feed stocks are obtained from the same sources, as our neighbours.

There is absolutely no justification for the Government to expect Zambian consumers to pay for bloated operational costs contained in a product whose global price is well known.

The cost of oil on the world market is well known. Many advanced countries, including South Africa have linked their pump price to the world market to ensure that consumers pay full value or indeed enjoy the benefit of reductions in the market when a glut occurs.

For various reasons this is not the case with Zambia.

Admittedly Zambia has to import comingled stock which may be marginally more expensive than refined product, but this is not an excuse to inflate the input costs to a level where they become unsustainable.

It is also no fair for Government to impose taxes and levies that make the product so expensive as to demand a “subsidy”

Therefore the starting point for the Government is to explain the nature of subsidy being debated.

The first point to explain is the expensive source of procurement. The award to Trafigura which came fifth in the ranking can not be said to have been the most economical and judicious.

Perhaps the first step would be for the Government to disclose the terms of the contract to assure Zambians that this was the most economical decision made and any allegation of impropriety were unfounded. Without this explanation it becomes very difficult to agree with Government assertions that the procurement was above board.

The last time the Government pronounced itself on oil, the Chairman of the Commission of Inquiry Wynter Kabimba was very categorical that trillions had been lost in dubious oil purchases. He has not changed the stand and the price of oil has not changed. Something is therefore amiss.

Zambians want an explanation for the Trafigura oil deal.

Categorized | Editorial

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