Illogical reasoning

A fallacy is faulty reasoning; misleading or unsound argument.

This is the asinine argumentation that this country is being asked to countenance in the current “power” struggle raging within the Patriotic Front.

The argument is that the Minister of Finance Mr. Alexander Chikwanda wants Government to pay the mines US$600 in withheld VAT because he has an interest in a company that supplies the mines; therefore he is corrupt and not fit to be a Minister.

We are encouraged that the Vice President Dr. Guy Scott has weighed in to dispel this cancerous thinking which has characterized self opinionated advocacy that this country has suffered in many years.

Every Government must balance between competing priorities. This Government chose VAT refunds as one of the incentives and indeed safeguards to ensure that all proceeds from sales of minerals were accounted for.

Indeed that  is why at the time of privatization, the mines were unbundled and very attractive development agreements entered into. Critics, including those with vested interests to protect, accused Government of giving away national assets because of the incentives and Greenfield conditions that appeared to favour investors.

These were courageous policies that have been proved by the test of time.

The policies have served to nurture and grow the industry into the current blossoming mining industry we are experiencing. The Government could have chosen the simple “Marxist” rhetoric to sink with its assets. Thankfully the Government decided otherwise hence the resurgent mining industry.

It is in this context that the current VAT debate must be viewed.

Any sensible person with an elementary understanding of economics will appreciate that a VAT refund is a financial imperative that Government is obligated to pay back.

Any Zambian visitor to South Africa is entitled to a refund on any receipted purchase. This is the law, and visitors assiduously collect VAT receipts because they are assured of a refund at the point of exit.

Businessmen including Mines have an expectation that Government would pay withheld VAT. The Government has a legal duty to pay. Withheld VAT is an accumulating debt that must be paid.

That is why it is ridiculous to assemble Clergymen to argue against a financial obligation that is underwritten  by law. It is certainly malicious and illogical to ascribe ulterior motives

The media is a powerful tool, which if rightly used can achieve national cohesion, consensus and focus for national good.

However, if wrongly used, it can be a source of confusion and strife.

Such was the case in Rwanda where a section of society, ostensibly the church, chose to target real and perceived enemies in a destructive campaign which resulted in genocide and displacement of millions of people.

 That country still has to come to terms with itself.

Sadly our country has witnessed the media  abused for vendetta attacks in which individuals have been targeted for vilification to the extent that  some have been  driven to their early graves.

We are confronted today with a case of similar abuse.

Early this year First Quantum, one of our major Mines among other withdrew a $1billion development programme because of Government decision to withhold VAT refunds. International observers complained that Government was injecting an element of uncertainty in otherwise unblemished record that had set Zambia as a favorite business destination.

We have reproduced at page 6 and 7 some of the stories published in the local and international media.

Our own Muhabi Lungu who spent many years at the Zambia Development Agency accused the Government of extorting and blackmailing mining companies by withholding VAT refunds. He warned that such action had the potential of creating instability in the mining industry.

All these complaints were raised long before the Minister of Finance Mr. Alexander Chikwanda stepped into the picture.

On July 2 an analyst from Maplecroft a global risk analysis institution warned that while Zambia had the right to impose measures to ensure full accountability there was a real danger that investor trust would be seriously impacted.

These are hard realities that must be confronted. However instead of dealing with the issue our “socialist” analysts quickly waxed into a Marxist mode accusing “imperialist and neo colonial” agents of conniving to dispossess Zambians of their assets.

Next time any person is maligned, please look through the sequence of reasoning, you will be amazed at how banal the arguments can be.

Categorized | Editorial

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