. Kadiresan

By SYLVESTER MWALE and NAKUBIANA MUMBUNA –
THE World Bank says the 2015 national budget recognises the importance of maintaining macro-stability aimed at reducing fiscal deficit.
World Bank country director, Kundhavi Kadiresan said the budget had showed that the Government was planning to generate higher revenues and control expenditure.
Finance Minister Alexander Chikwanda announced some changes in the mining tax regime when he presented the 2015 National Budget on Friday.
Significant among them, Mr Chikwanda proposed to redesign the mining fiscal regime by replacing the current two tier system with a simplified mining tax structure which will see an eight per cent mineral royalty for underground mining operations and 20 per cent mineral royalty for open cast mining operations as a final tax.
“These are desirable objectives but the Government will have to work hard to achieve them.
“The budgeted increase in revenues is largely premised on a major change in the mining fiscal regime. The new regime shows an almost complete dependence on minerals royalty,” Dr Kadiresan said.
She noted that good international practice showed reliance on both profit taxes and royalties in the mining tax regime.
She, however, noted that the next year’s budget had failed to provide enough information on how the unresolved amount of US $600 million would be treated in the fiscal framework.
In a related development, Economist Yusuf Dodia has said the 2015 national budget is impressive because 88 percent of the total budget will be funded from domestic revenue.
Speaking in reaction to the K 46.7 billion national budget presented to Parliament by Mr Chikwanda on Friday, Mr Dodia said it was impressive that only 12 per cent of the total budget would be dependent on foreign borrowing.
“This means that we are breaking away from foreign financing and becoming independent. We should continue in this direction as this allows us to make decisions based on our own economic needs, “he said.
He noted that tourism and manufacturing sector had been neglected in the 2015 national budget.
On mining taxation, Mr Dodia said Government should put measures that would ensure maximum benefits from the mines, saying the newly introduced taxes were not impressive.
Another economist, David Punabantu said incentives in the 2015 national budget to promote local edible oils and roofing sheets was good as it would promote the local industries.
Government has increased duties on imports of edible oils and roofing sheets in the 2015 national budget.
Meanwhile, the Non Governmental Organisations Coordinating Council (NGOCC) has commended Government on the allocation of K 9.4 billion to the education sector.
The organisation has also welcomed the increased allocation to student’s bursaries where Government has allocated a total of K200.2 million.
NGOCC executive director Engwase Mwale, however, called on the Government to put in place affirmative action’s to ensure that more rural students especially girls access the scheme.
The K 9.4 billion allocated to the education sector translates into 20 per cent of the total national budget for 2015.
On agriculture, Ms Mwale commended Government for efforts to improve the agriculture sector.
Ms Mwale also commended the Government on the infrastructure development plans in tertiary education sector.
However, Ms Mwale noted that the 2015 national budget was Gender blind stating that it does not adequately address gender inequalities to assure economic independence of women and children.