Debates - Tuesday 16th December, 2014 | National Assembly of Zambia

DAILY PARLIAMENTARY DEBATES FOR THE FOURTH SESSION OF THE ELEVENTH ASSEMBLY

Tuesday 16th December, 2014

The House met at 1430 hours

[MR SPEAKER in Chair]

NATIONAL ANTHEM

PRAYER

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QUESTIONS FOR ORAL ANSWER

DOCTOR AND X-RAY MACHINE AT MWANDI HOSPITAL

289. Dr Kaingu (Mwandi) asked the Minister of Health:

(a) whether the Government was aware that Mwandi Hospital has had no medical doctor and an X-ray machine for a long time now;

(b) if so, why a doctor had not been deployed to the hospital;

(d) when the Government would procure an X-ray machine for the hospital.

The Deputy Minister of Health (Dr Chilufya): Mr Speaker, the Government is not aware that Mwandi Hospital has had no medical doctor for a long time now. As a matter of fact, Mwandi has had one medical doctor from September, 2013. You may also wish to note that the doctor is being assisted by a medical licentiate. Another doctor from Mwandi Hospital is currently studying his Masters in Medicine (MMed) and will be replaced soon.

Sir, the Government is in the process of procuring mobile x-ray machines as an adjunct measure before it procures other X-ray machines in 2015. So, within the next four to eight weeks, we expect the mobile X-ray machine to be deployed at Mwandi Hospital.

In the meantime, our patients are being referred to neighbouring hospitals in Livingstone and Sesheke.

Mr Speaker, I thank you.

Dr Kaingu: Mr Speaker, it is obvious that the Government does not know that Mwandi Hospital has not had a medical doctor for so long. Truly, the medical doctor who was at Mwandi Hospital is on study leave and since then, there has not been a medical doctor at the hospital.

Mr Speaker, now that the hon. Minister is aware that the medical doctor at Mwandi Hospital is on study leave, what help will be rendered to the people of Mwandi in order for them to have a medical doctor?

In the same vein, Sir, now that the hon. Minister is aware that there is no X-ray machine at the hospital, what emergency arrangements are being made to help the people of Mwandi with an X-ray machine? Referring somebody who is not well to Livingstone is not healthy. In fact, by the time the patient arrives in Livingstone, many complications would have happened.

Dr Chilufya: Mr Speaker, I would like to encourage hon. Members of Parliament to interact freely with our technocrats on the ground. The hon. Member of Parliament may wish to visit Mwandi Hospital and interact with Doctor Baikayo, who has been providing a service there since September, 2013. It would be good if you visited that hospital a little more frequently, then, you would know that, that is the position.

Sir, the X-ray machine at the hospital is obsolete. We tried to fix it, but our technocrats gave a report that it was obsolete and not worth fixing. The measure to refer patients to Sesheke and Livingstone is temporal. As I said, there is procurement planned for 2015 for X-ray machines. In the meantime, we have placed an urgent order for the procurement of mobile X-ray machines and one will be deployed to Mwandi Mission Hospital within the next four to eight weeks.

I thank you, Mr Speaker.

Prof. Lungwangwa (Nalikwanda): Mr Speaker, Mwandi District might have a population of, I think, more than 40,000 people. Is one doctor sufficient to service such a huge population? Can the hon. Minister enlighten the House what the realistic doctor population ratio is with respect to what is obtaining in Mwandi.

Dr Kaingu: Thank you.

Dr Chilufya: Mr Speaker, we are aware of the human resource we have in the country and the doctor-patient ratio is not the best that we have at the moment. To improve the doctor-patient ratio, through our National Training Operational Plan, we have embarked on a plan to increase outputs from the training institutions and we have also encouraged private sector participation in the production of medical doctors. So, yes, while Mwandi Mission Hospital deserves more doctors, the numbers that we have, at the moment, are what we can afford.

Sir, the referral system is functional. What we expect to be handled at Mwandi Mission Hospital are only cases that cannot be handled at the base, at primary health care level, at the health centres. We also have another level of referral beyond Mwandi. If the doctor is overwhelmed either by capacity or numbers, there is still another level of referral to a third level hospital to Livingstone General Hospital.

Mr Speaker, I thank you.

Mr Mbewe (Chadiza): Mr Speaker, it is gratifying to …

Interruptions

Mr Speaker: Order, on the right!

Mr Mbewe: … note that the Government is training more doctors. Since Independence, Zambia has trained a lot of doctors in different fields within the health sector. Most of these doctors have left the country and are working elsewhere within Africa or outside Africa. Since the Government has embarked on a programme of training more doctors, what measures have been put in place to see to it that those doctors are retained and, at the same time, attract those doctors who have gone out to come back and work in Zambia?

Dr Chilufya: Mr Speaker, training more doctors is just one intervention in the National Training Operational Plan. The other one is attracting doctors to come back. I must mention that the Patriotic Front (PF) Government has improved the salaries of its medical doctors and they are a benchmark for the region. As we speak, we do not need to have our doctors working around the region because we pay better than most countries in the sub-region. So, when we said that we would put more money in people’s pockets, that included doctors. We have the best conditions for doctors in the region and doctors are trooping back home.

Mr Speaker, I thank you.

Mr Muntanga (Kalomo Central): Mr Speaker, why is it that every time doctors are sent to rural areas, and subsequently for training, there is no effort to replace them or bring in other doctors to stand in for them? Why is it a trend for rural areas to have no doctors because the ones who should be there have gone for some kind of training and have not been replaced?

Dr Chilufya: Mr Speaker, we do not encourage this situation. In our National Training Operational Plan, we demand that districts have training plans. Whenever a doctor is sent for training, we demand that there be another doctor to replace the one leaving. It is for this reason that in Mwandi, for instance, we have Dr Baikayo to actually replace the one who is doing his a MMED in Pediatrics at the University Teaching Hospital (UTH). Our practice is to have a doctor to take over, before sending a doctor for training. This is our policy. As a matter of fact, there are a number of doctors who have not been allowed to go for training because we have not managed to find people to replace them. This is the policy as we speak.

Mr Speaker, I thank you.

Mr Simbao (Senga Hill): Mr Speaker, I would like to find out how many doctors will be graduating per year, starting this year, from all the schools that are now training doctors in the country.

Dr Chilufya: Mr Speaker, I would need to research to come up with the exact numbers that will be graduating every year. Suffice to say that we have increased the numbers at all our medical training institutions. We are constructing a new medical school in Ndola and when we complete the first phase, next year, we will increase from thirty-three to 300 per intake. In terms of the overall number from all the training institutions, including the private sector, I would beg to come back with the exact answer.

Mr Speaker, I thank you.

Mr Mtolo (Chipata Central): Mr Speaker, it is delightful to hear, if I got the hon. Minister right, that he will deliver the X-ray machine to Mwandi in the next three weeks. Could the hon. Minister also inform the nation on the progress as regards the Computerised Tomography (CT) Scans that were promised for each province in the country?

Dr Chilufya: Mr Speaker, firstly, I did not say three weeks to deliver the X-ray machine to Mwandi. I said four to eight weeks. Secondly, on the CT Scans, the Government embarked on a programme to modernise all general hospitals and this included infrastructure expansion and equipment procurement, including CT Scans, so that we escalate the levels of service and make them equivalent to the hospitals’ levels of accreditation.

Mr Speaker, we are doing it in a phased approach. We have procured CT Scans for the four third level hospitals and are at various levels of installation. For Kasama, Chipata and Mansa, we expect the CT Scans to be in within the next eight weeks because they are already in transit and we expect installation to be completed before we embark on the next phase.

Mr Speaker, I thank you.

Mr Mwiimbu (Monze Central): Mr Speaker, the hon. Minister has just informed the nation that we have the best conditions of service for doctors in the region. As a result of those extra-ordinary conditions of service for doctors in Zambia, I would like to find out from him how many doctors have left their luxurious lives in the neighbouring countries to come back to serve in squalor conditions in Zambia?

Dr Chilufya: Mr Speaker, I will come back with exact numbers, but would like to reassure the hon. Member of Parliament that our conditions of service are a benchmark for the region and a number of doctors have come back. We have also attracted foreign doctors to come and work with us. This has happened under the PF Government because it promised to better the conditions of service for its specialists.

Mr Speaker, I thank you.

VILLAGE AND FARM DESTRUCTION IN LUKUSUZI GMA

290. Mr I. Banda (Lumezi) asked the Minister of Tourism and Arts:

(a) what caused the unrest, which resulted in the destruction of villages and farms by the Zambia Wildlife Authority (ZAWA) officers, in Lukusuzi Game Management Area in Mwase-Mpangwe Chiefdom on 10th December, 2014;

(b) what measures the Government had taken to resolve the problem and ensure that similar incidents do not recur;

(d) when the Government planned to relocate the people living in the area.

The Deputy Minister of Tourism and Art (Mr Evans): Mr Speaker, by way of a brief background, allow me to explain to this august House what transpired in Lukusuzi National Park. Prior to 11th December, 2014 incidents, the Government, through the Zambia Wildlife Authority (ZAWA), had engaged both the traditional leaders and affected communities to find a lasting solution to the matter. The local chiefs agreed to provide land to the would-be relocated residents. The Government went further to inform the provincial Permanent Secretary, the District Commissioner and the two royal highnesses regarding the impending relocation.

Mr Speaker, during consultative meetings, illegal settlers were reminded that it was illegal to settle in a protected area. In this regard, the local traditional leaders offered to provide land where the encroachers would settle in the two chiefdoms. Timelines were, therefore, given to the families to shift. Unfortunately, these people did not move.

Mr Speaker, in order to find a lasting solution, the Government:

(a) through the security wings, pulled down all makeshift houses in the national park;

(b) through the traditional leadership, offered to settle affected families in line with the agreements made during consultative processes;

(c) through the Ministry of Tourism and Art and the Ministry of Mines, Energy and Water Development, will monitor activities in the national park; and

(d) together with the local leadership, will conduct sensitisation activities against settling in protected areas.

Mr Speaker, the Government has no plans to compensate displaced families because they were illegal settlers. It is not allowed to settle in protected areas. As far as the Government is concerned, this issue is addressed because the local chiefdoms offered to provide relocated residents with fresh land.

Mr Speaker, I thank you.

Mr I. Banda: Mr Speaker, contrary to what has been said, the said villages were established over five years ago and the settlers have not been given any land to relocate to by any traditional leadership.

Mr Speaker, it is now during the rainy season and many of these people have already planted seed in their fields. Would the hon. Minister not be able to wait until they harvest and then relocate them to a better place where they can negotiate with the chiefs? As at now, no land has been found for these people.

The Minister of Tourism and Art (Ms Kapata): Mr Speaker, as far as we are concerned, the whole programme of evicting these illegal settlers who have encroached the national park started in 2010. In September, 2014, these illegal settlers were given notices to vacate the place, but they did not do so until 10th November, 2014. We already negotiated for land, which these evicted settlers are supposed to be relocated to, with Chief Chikomeni and Chieftainess Mwase Mpangwe. So far, sixty-one families have been relocated to that land.

I thank you, Sir.

Mr Konga (Chavuma): Mr Speaker, can the hon. Minister explain the logic why, on one hand, the Government burnt down the houses of the villagers who had illegally settled in the park, and yet, on the other hand, has allowed mining operations to take place in the park? Both the villagers and the mining company are conducting their activities in the park. Therefore, why did the Government burn down the houses of the villagers, and yet allow mining operations in the park?

Ms Kapata: Mr Speaker, in fact, we have not allow mining in the game parks.

Mr Konga interjected.

Ms Kapata: Yes, we do not allow.

Mr Speaker: Order!

Hon. Minister, address Mr Speaker, or address him through Mr Speaker.

Ms Kapata: Mr Speaker, the reason we are moving the settlers away from the game park is because the animals will eat up their crops if they continue staying there. Therefore, we are avoiding human-animal conflict.

I thank you, Sir.

Mr Mwale (Chipangali): Mr Speaker, Hon. I. Banda asked whether the Government can give these people a bit more time and wait until they harvest their crops before relocating them to whichever place has been found for them. I think that that question was not answered.

Ms Kapata: Mr Speaker, I think that I answered that question. The exercise of informing them to leave the place started in 2010, and this is 2014. Therefore, they were told to relocate in 2010, but they did not move.

I thank you, Sir.

Dr Kaingu: Mr Speaker, the question here is about evicting people from a Game Management Area (GMA). However, when giving answers, the hon. Minister has been referring to the place as a game park. Are the people in the game park or in the GMA? For your information, hon. Minister, your Government authorised mining in the Lower Zambezi National Park.

Ms Kapata: Mr Speaker, I will start with the last comment. Up to now, no mine has opened in the Lower Zambezi National Park because it is in conflict with the Ministry of Tourism and Art. Therefore, the mine is not operating. Now to answer the other question, the place they are being evicted from is a national park.

I thank you, Sir.

Mr Mbewe: Mr Speaker, can the hon. Minister of Tourism and Art and the hon. Minister of Lands, Natural Resources and Environmental Protection dialogue so that they can release part of the land from the national park to the people? I say this because, at the moment, there is high population in that area and, therefore, there is pressure for the land. Do the hon. Ministers have the intention to dialogue and do that?

Ms Kapata: Mr Speaker, we do not have those intentions because the chiefdoms around Lukusuzi National Park have land. We, as the Government, know that these people have not encroached on the national park because they need land for farming. The reason that they have encroached on it is because they are looking for gemstones and want to engage in poaching, which is very prevalent in that area.

I thank you, Sir.

Mr Hamudulu (Siavonga): Mr Speaker, the hon. Minister has indicated that the plan to relocate these people started way back in 2010. According to the Government, is this the best time it could have picked to displace those people when it knows very well that the rains have started? Would it not have thought of a better time than now to relocate them?

Ms Kapata: Mr Speaker, I think that I have already addressed that question, and I am not ready to answer it again because I have already given reasons why this has been done.

I thank you, Sir.

Prof. Lungwangwa: Mr Speaker, I will ask my question from a very important policy perspective. Anybody dealing with policy has to wear two hats. One hat has to do with the dialectical understanding of issues while the other has to do with the diametrical understanding of issues. The hon. Minister here is more diametrical in her understanding of the issue, instead of being dialectical. Now, this issue has to do with sensitivity, and as far as your sensitivity is concerned, you are more sensitive to the animals and not the human beings. Why are you so insensitive to the human beings who are supposed to be …

Hon. Members: Dialectical.

Prof. Lungwangwa: … looked at in a more sympathetic manner? Can the hon. Minister answer that?

Mr Speaker: Order!

I am glad that we have been able to follow the question even without the words “dialectical” and “diametrical.”

Laughter

Ms Kapata: Mr Speaker, I want to put it on record that whatever happened was unfortunate. I have already said that this exercise did not start today. It started a long time ago and stakeholders were brought together, and the villagers had agreed to move. Some of them even relocated to other villagers, but they came back to the national park afterwards. Therefore, as the Government, I think that we have done what we can. As I speak, the officers from the Disaster Management and Mitigation Unit (DMMU), under the Office of the Vice-President, are on the ground trying to assist these people to relocate. They are also giving them better shelter, food and whatever else they need.

I thank you, Sir.

RURAL HEALTH CENTRES IN NCHELENGE CONSTITUENCY

291. Mr Mpundu (Nchelenge) asked the Minister of Community Development, Mother and Child Health when the Government would construct rural health centres at the following locations in Nchelenge Parliamentary Constituency:

(a) Malulu near Kashikishi; and

(b) Lushiba.

The Deputy Minister of Community Development, Mother and Child Health (Mrs Mphande): Mr Speaker, the construction of these centres in Nchelenge Parliamentary Constituency will be undertaken under the 2015 Infrastructure Operation Plan.

I thank you, Sir.

PRIMARY SCHOOL CONSTRUCTION IN MWIIMBA AREA

292. Mr Antonio (Kaoma Central) asked the Minister of Education, Science, Vocational Training and Early Education when the Government would construct a primary school in Mwiimba area of Kaoma Central Parliamentary Constituency, considering that the nearest school is located about 45 km away from Lunyati.

The Deputy Minister of Education, Science, Vocational Training and Early Education (Mr P. Ngoma): Mr Speaker, I wish to inform the House that the Government has taken note of the need to construct a primary school in Mwiimba area of Kaoma Central Parliamentary Constituency.

Mr Speaker, this is a project that will only be considered in future school infrastructure development plans. The hon. Member of Parliament is urged to liaise with the Office of the District Education Board Secretary (DEBS) to help identify the area where the school can be constructed.

It should be noted that in some districts, schools have been constructed using the Constituency Development Fund (CDF), with help from area the hon. Members of Parliament if the need is great and if communities are ready to participate by mobilising up-front building materials.

I thank you, Sir.

ZAF AIRCRAFT ACCIDENTS’ INVESTIGATION

293. Mr I. Banda asked the Minister of Defence:

(a) whether investigations into the cause of the two Zambia Air Force aircraft accidents in Livingstone and Lusaka had been undertaken; and

(b) if so, what the findings were.

The Deputy Minister of Defence (Col J. Lungu): Mr Speaker, the Zambia Air Force (ZAF) instituted Boards of Inquiry where both cases were considered. The proceedings of the board have not been completed. Upon completion of the investigations, the proceedings, which will include the findings and recommendations, will be submitted to the confirming authority, who is the Commander-in-Chief of the Armed Forces.

I thank you, Sir.
BRIDGE CONSTRUCTION ACROSS LUKUSASHI RIVER

294. Mr Kunda (Muchinga) asked the Minister of Transport, Works, Supply and Communication:

(a) whether the Government had any plans to construct a bridge across the Lukusashi River, leading to Kaombe in Chief Chisomo’s area in Muchinga Parliamentary Constituency;

(b) if so, when the construction works would commence; and

The Deputy Minister of Transport, Works, Supply and Communication (Mr Mwimba H. Malama): Mr Speaker, yes, the Government has plans to construct a bridge across the Lukusashi River, leading to Kaombe in Chief Chisomo’s area in Muchinga Parliamentary Constituency.

Mr Speaker, the Government, through the Road Development Agency (RDA), is in the process of engaging a consultant to carry out a detailed engineering design of the bridge. The consultancy contract for the design of the bridge is expected to be advertised by 31st January, 2015.

Sir, works for the construction of the bridge are expected to commence in the first quarter of 2016, upon completion of the designs and the engagement of the contractor. The estimated cost of the project will be known once the designs have been completed.

I thank you, Sir.

Mr Kunda: Mr Speaker, 2016 is too far. What quick measures has the Government put in place to avoid loss of life as a result of crocodile attacks?

Mr Mwimba H. Malama: Mr Speaker, there is a temporary timber bridge which the people are using. Compared to the period between 1964 to-date, 2016 is not so far. It is only a year from now.

Hon. Government Members: Hear, hear!

Mr Mwimba H. Malama: I am sure that the people of this area will have a permanent bridge soon.

I thank you, Sir.

ANTI-RETROVIRAL THERAPY ROOM AT SESHEKE DISTRICT HOSPITAL

296. Mr Sianga (Sesheke) asked the Minister of Health whether the Government had any plans to construct an Anti-Retroviral Therapy (ART) room which was separate from the outpatients department block at Sesheke District Hospital.

Dr Chilufya: Mr Speaker, the Government has no plans to construct an Anti-Retroviral Therapy (ART) room at Sesheke District Hospital. We believe that the construction of separate ART rooms promote stigma. However, we admit that there is inadequate infrastructure for outpatient services at the hospital and we plan to expand the outpatients’ department block to ensure that we provide integrated services at the hospital adequately.

Mr Speaker, I thank you.

Mr Sianga: Mr Speaker, when will this expansion commence?

Dr Chilufya: Mr Speaker, expansion has been planned for within the 2015/2017 Medium Term Expenditure Framework (MTEF).

I thank you, Sir.

Mr Miyutu (Kalabo Central): Mr Speaker, I noted the hon. Minister’s response concerning stigma. I would like to find out what the Government will do to curb the stigma at hospitals like Kalabo District Hospital where there is a separate building for Anti-Retroviral Therapy (ART).

Dr Chilufya: Mr Speaker, the policy of the Government is to integrate the services that it provides. So, all the buildings that are referred to as ART Service Buildings will be no more.

I thank you, Sir.

KAPIRI MPOSHI DISTRICT OFFICE

297. Mr Musonda (Kapiri Mposhi) asked the Minister of Chiefs and Traditional when the following facilities would be provided at the Kapiri Mposhi District Office:

(a) office accommodation;

(b) furniture; and

The Deputy Minister of Chiefs and Traditional Affairs (Mrs Kawandami): Mr Speaker, there is no provision in the Budget for the construction of offices. Currently, Kapiri Mposhi district officers are accommodated at the office of the District Commissioner.

Sir, the ministry has already begun the process of procuring office furniture for provincial and district offices. The ministry has procured and delivered a motor vehicle for the provincial office in Central Province. When funds are made available, the ministry will endeavour to procure vehicles for the districts in a phased manner.

I thank you, Sir.
OPERATIONALISATION OF NCHANGA CLINIC

298. Mr Hamusonde (Nangoma) asked the Minister of Community Development, Mother and Child Health:

(a) when Namabanga Clinic in Nangoma Parliamentary Constituency would be opened to the public; and

(b) when the construction of staff houses at the clinic would commence.

Mrs Mphande: Mr Speaker, it is expected that Namabanga Rural Health Centre will be ready for opening by June, 2015.

Sir, the construction of staff houses at Namabanga Rural Health Centre has commenced with the support of our co-operating partner, Child Fund, and is almost at wall plate level.

I thank you, Sir.

Mr Hamusonde: Mr Speaker, why is it that the Government does not first construct a proper road to a particular area as it plans to build a school there?

The Minister of Community Development, Mother and Child Health (Ms Kabanshi): Mr Speaker, there was no request for a road made by the people of Namabanga. If a request was made, then, something would have been done about it.

I thank you, Sir.

Mr Lufuma (Kabompo West): Mr Speaker, now that there is a request directly from the hon. Member from that area, what will be done about it?

Ms Kabanshi: Mr Speaker, requests are not made on the Floor of the House. I am requesting the hon. Member to use to the proper channels to make that request.

I thank you, Sir.

Mr Hamudulu: Mr Speaker, when a school is built, it is expected that pupils, teachers and other people will go to that school. Is there really a need for a request to put up a road to be made when it is known that people will have to trek to wherever the school is?

Ms Kabanshi: Mr Speaker, I wonder why the hon. Member is asking me about a school and pupils. The issue at hand is the rural health centre. It is important that we encourage the communities to participate and contribute to the development of the nation.

I thank you, Sir.

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BILLS

SECOND READING

THE INCOME TAX (Amendment) BILL, 2014

The Minister of Finance (Mr Chikwanda): Mr Speaker, I beg to move that the Bill be now read a second time.

Sir, the Bill before this House is principally seeking to amend the Income Tax Act so as to increase the presumptive tax payable by individual operators of public passenger service vehicles. This presumptive tax currently ranges between K600 per annum and K7,000, depending on the sitting capacity of a vehicle. With the proposed changes, the payable rates will range from K1,200 to K14,400 per annum.

Mr Speaker, as hon. Members of the House are aware, this tax has been put in place to make it easy for individuals who operate either buses, minibuses or taxis to be tax compliant. The Bill also seeks to rationalise income tax reductions when determining taxable income by restricting the deduction of bad and doubtful debt incurred by banks and other financial institutions to only debt not covered by security of collateral pledged. The Bill further proposes the streamlining of the requirement to submit income tax returns and financial accounts in line with advances that the Government has made regarding electronic filling of returns.

Sir, other proposed changes to the Income Tax Act are simply meant to align the Income Tax Act to the relevant provisions in the other Acts and also to strengthen the law for better and effective tax administration. This Bill is straightforward and I recommend it to the House.

I beg to move.

Mr Hamududu (Bweengwa): Mr Speaker, your Committee considered the Income Tax (Amendment) Bill, 2014. In doing so, various stakeholders were invited to appear before it to make both written and oral submissions. I will, now, highlight some of the findings and recommendations of your Committee.

Sir, most of the stakeholders appreciated the need to increase the presumptive tax which has not been increased since 2004. However, they were concerned that the increase was too high and that it might lead to a corresponding increase in transport fares which might adversely affect people’s disposable income.

Mr Speaker, some witnesses were concerned about the proposed online system of submitting income tax returns without the accompanying audited financial statements. They explained that the proposal was at variance with good financial practices. They further explained that the proposal would render irrelevant all the efforts that the Zambia Institute of Charted Accountants has been making in strengthening the financial reporting system. They further argued that the proposal was detrimental to fostering collaboration between the Zambia Institute of Charted Accounts and the Zambia Revenue Authority (ZRA) in enforcing regulatory financial compliance.

Sir, in agreeing with the observations raised by the stakeholders, your Committee recommends that financial statements should accompany the online submission of Income tax returns.

Mr Speaker, I wish to conclude by thanking all the witnesses that appeared before your Committee for their valuable input. Your Committee also appreciates the services rendered by the Office of the Clerk of the National Assembly and her staff during its deliberations.

Sir, lastly, allow me to thank you for affording your Committee an opportunity to consider this Bill.

I thank you, Sir.

Mr Chikwanda: Mr Speaker, I to thank the Committee on Estimates and hon. Members for supporting the Bill. I also with to take note of the observations made by your Committee as well as issues raised by other stakeholders. May I take this opportunity to respond to some of them.

Sir, a concern was raised that the proposed changes to the presumptive regime may adversely affect public passenger vehicle operators and the public. As hon. Members of the House may be aware, this tax was introduced in 2004 to make it easier for individuals who operate minibuses or taxis to be tax compliant. When arriving at the payable rates, consideration was given to the sitting capacity of various buses and how much revenue, on average, such buses would generate on a monthly basis. However, the presumptive tax rates have not been adjusted for the last ten years. The 2015 proposed rates take into account price changes over this period and we are confident that they are not prohibitive at all, but affordable and will induce due compliance.

Mr Speaker, on the matter regarding restriction of deductions of bad and doubtful debt, I wish to assure the House that this will not discourage access to the finances, especially by medium and small-scale enterprises, as feared by the Committee on Estimates and other stakeholders. This is because the proposed law is such that where collateral covers the debt, deduction will not be allowed since there will be no loss in such cases.

On the other hand, if in the process of loan recovery, the collateral pledged does not cover the entire debt, the Commissioner-General will allow for deduction of bad and doubtful debt in determining taxable income to the extent not covered by the collateral.

Mr Speaker, another concern was raised that, under the proposed change, the requirement to submit income tax returns without accompanying audited financial statements is at variance with good practice. I wish to assure the House that under an electronic return, all tax payers will still be required to submit information on their financial accounts. Submission of other documents, as prescribed by the law, however, will only be as and when the Commissioner-General will consider it necessary to support an electronic return.

Mr Speaker, this Bill is straight forward and I recommend it to the House.

Mr Speaker, I beg to move.

Question put and agreed to and the Bill read a second time.

Committed to a committee of the Whole House.

Committee on Wednesday, 17th December, 2014.

THE CUSTOMS AND EXCISE (Amendment) BILL, 2014

Mr Chikwanda: Mr Speaker, I beg to move that the Bill be now read a second time.

Sir, the Bill before the House is principally seeking to amend the Customs and Excise Tax Act so as to:

(a) increase excise duty on un-denatured spirits of alcoholic content of 80 per cent or higher for unlicenced manufacturers;

(b) increase the customs duty on explosives;

(d) increase the specific customs duty rate on edible oil;

(e) remove the customs duty on aviation fuel; and

(f) provide for matters connected with or incidental to the foregoing.

Sir, the Bill is straightforward and I recommend it to this House.

Mr Speaker, I beg to move.

Mr Hamududu: Mr Speaker, your Committee considered the Customs and Excise (Amendment) Bill, N.A. B. No. 5 of 2014. In doing so, various stakeholders were invited to appear before your Committee to make both written and oral submissions. I now highlight some of the findings and recommendations of your Committee.

Mr Speaker, your Committee interacted with various stakeholders to consider this Bill and they observed that the Government has proposed to increase duty on edible oils, iron sheets and explosives. Your Committee supports these intentions as they are meant to promote the local manufacturing industry. However, it is of the view that while this increase in customs duty may discourage imports from the far east, it may not apply fully to products emanating from the Common Market for Eastern and Southern African (COMESA) and the Southern Africa Development Community (SADC) regions. This is in view of the evolving trade protocols within the COMESA and SADC regions. In this regard, your Committee recommends that the Government should instead, work and at reducing the cost of doing business in Zambia.

Sir, I wish to conclude by thanking all the witnesses that appeared before your Committee for their valuable input. Your Committee also appreciates the services rendered by the Office of the Clerk of the National Assembly and her staff during its deliberations.

Sir, lastly, allow me to thank you for according your Committee an opportunity to consider the Bill.

Mr Speaker, I thank you.

Mr Chikwanda: Mr Speaker, I wish to thank the Committee on Estimates and hon. Members for supporting the Bill. I have taken note of the observations made by your Committee as well as those raised by other stakeholders. The Government is committed to accelerating its strategy on industrialisation and job creation so that it can reduce poverty. In doing so, priority investment sectors have been identified while qualifying investors in these sectors are entitled to various tax and non-tax incentives.

Sir, it is in keeping up with this commitment that the proposed amendments to the Bill have been proposed. While Zambia remains a member of both COMESA and SADC, it is envisaged that the proposed tax measures will contribute to submitting business developments in the explosives, edible oils and roofing sheets sub-sectors by promoting competitiveness, fostering value-addition and stipulating local production and employment creation. The observation made by your Committee regarding the desire to lower the cost of doing business in Zambia is very valid and, as a nation, we must work towards achieving that eventuality. However, the issue is multi-dimensional and it requires quite a lot to be done.

Mr Speaker, I beg to move.

Question put and agreed to and the Bill read a second time.

Committed to a committee of the Whole House.

Committee on Wednesday, 17th December, 2014.

THE MINES AND MINERALS DEVELOPMENT (Amendment) BILL, 2014

Mr Chikwanda: Mr Speaker, I beg to move that the Bill be now read a second time.

Sir, the Bill before this House is principally seeking to restructure the tax regime for mining operations by replacing the current tax structure that has a combination of corporate income tax, profit variable tax and a mineral royalty with a simple mineral royalty-based system that will be final. Thus, the Bill proposes to increase the rate of mineral royalty as follows:

(a) from 6 per cent to 8 per cent for underground mining operations; and

(b) from 6 per cent to 20 per cent for open cast mining operations.

Mr Speaker, the proposed tax regime for the mining sector is meant to ensure that the Government gets a fair share of revenue from the exploitation of its non-replenishable and renewable mineral resources while ensuring that the mining sector equally contributes its fair share, given the trend in the international prices of copper and other base metals that are mined in Zambia.

Mr Speaker, the amendments that have been proposed are necessary and I commend the Bill to the House.

Mr Speaker, I beg to move.

Mr Hamududu: Mr Speaker, your Committee considered the Mines and Minerals Development (Amendment) Bill, National Assembly Bill No. 8 of 2014. In doing so, various stakeholders were invited to appear before your Committee to make both written and oral submissions. I now highlight some of the findings and recommendations of your Committee.

Sir, your Committee shares the views of the Government that although Zambia has sizable mining activities, the country has not realised adequate returns from the mining sector to support the development agenda. It also agrees with the need for the country to optimise the benefits and returns from mining.

Mr Speaker, your Committee also appreciates the need to review the mining tax regime. However, it notes the concerns emanating from stakeholders regarding the proposed mining tax regime which replaces the current tax structure which has a combination of the corporate income tax and a mineral royalty, with a mineral royalty as a final tax.

Sir, most of the stakeholders observed that copper production, through smelting, is a function of co-mingling of various mineral ores which are blended to come up with copper products. They further observed that the ingredient ores for copper may be extracted from a combination of ores from open pit and underground mines. In this regard, they were concerned that the identification, with respect to the source of the ingredient ore making up the copper product and the applicable mining royalty tax rate will be a challenge. Other witnesses argued that the grade of copper and cost structure of the open cast mines was not the same. While some mines may have high grade copper ore with relatively low cost, other open cast mines have high cost, low grade and low yield ore bodies. They were, therefore, concerned that increasing the mineral royalty rate to 20 per cent might lead to operational challenges to mines that have high cost operations.

Mr Speaker, taking into account the concerns raised by witnesses and the need to optimise the revenue from the mines, your Committee notes that the proposed mining tax regime may bring about both positive and negative results. Your Committee, therefore, recommends that care be taken to ensure that in the event that the results of implementing the revised mining tax regime are not favourable, necessary measures will be put in place to cushion the impact.

Interruptions

Mr Speaker: Order, on the right!

Mr Hamududu: … the Bill.

Mr Speaker, I thank you.

Mr Chikwanda: Mr Speaker, I wish to thank the Committee on Estimates and hon. Members for supporting the Bill. I also wish to take note of the observations made by your Committee and issues raised by other stakeholders, which are all in good faith. May I take this opportunity to respond to some of them.

Mr Speaker, we are cognisant of the fact that our tax system must be buoyant while retaining a mix of different tax types. The challenge with the current mining tax regime, however, is that it is terribly susceptible to all forms of tax planning schemes such as transfer pricing, trading through shelf corporations and tax havens and our revenue administration cannot easily detect these mechanisms. Further, provisions on capital allowances and carry forward of losses eliminate potential taxable profits.

Sir, as I indicated in this House during my address when winding up the policy debate …

Interruptions

Mr Chikwanda: I wish …

Interruptions

Mr Speaker: Order!

Mr Chikwanda: … to appeal to my honorable colleagues to maintain silence because it is difficult to read when there is loud noise.

Sir, as I indicated to this House during my address when winding up the policy debate, the current tax structure is illusory as only two mining companies are currently paying company income tax as most of them claim that they are not in tax paying positions.

Mr Speaker, the Government has to, however, use options that are available to ensure that our country retains a fair share from its non replenishable mineral resource endowment.

Sir, it is envisaged that the proposed changes will increase revenue collections from the mining sector to achieve a more equitable distribution of mineral wealth between the Government and the mining companies.

Mr Speaker, in coming up with the 8 per cent and 20 per cent mineral royalty rates, the Government has taken into account the different cost structures for underground mining and open-cast mining. This is necessary in answering the question of viability, given the current metal prices. Instead of basing revenue collections from the sector on profits which have mostly not been recorded by mining companies currently, the proposed regime is easy to administer by the revenue authority as it will focus on production levels and content of the minerals.

Sir, concerning the issue of potential complexity regarding the need to segregate production from underground operations, open-cast operations and mineral processing for tax purposes, I wish to assure the House that mining companies keep records, which can be relied upon, on production from either underground or open-cast operations, whatever the case may be.

Mr Speaker, we are confident that the Mining Value Chain Project being spearheaded by my ministry and the Zambia Revenue Authority and the modernisation of the Department of Mines, currently underway, will mitigate the challenge of ascertaining the values of our minerals so that we collect appropriate taxes. We are also hopeful that this will help promote information between the Government and the mining companies.

Sir, within the existing statues, there are mechanisms for relief where it is due, warrantable and where the mining companies prove beyond doubt that they have established a valued case for such relief.

Mr Speaker, this Bill is straight forward and I recommend it to the House.

Mr Speaker, I beg to move.

Question put and agreed to and the Bill read a second time.

Committed to a committee of the Whole House.

Committee on Wednesday, 17th December, 2014.

THE VALUE ADDED TAX (Amendment) BILL, 2014

Mr Chikwanda: Mr Speaker, I beg to move that the Bill be now read a second time.

Sir, the Bill before this House is principally seeking to amend the Value Added Tax Act so as to:

(a) provide for mandatory electronic filing for returns where the return has ten or more transactions;

(b) provide clarity on the effective date of charging penalty on delayed payment of taxes due on a return;

(c) provide for the de-registration of suppliers whose turnover falls below the registration threshold within an accounting year;

(d) provide clarity on the anti-avoidance provisions; and

(e) provide for matters connected with, or incidental to, the foregoing.

Sir, this Bill is reasonably straight forward and I commend it to the House.

Mr Speaker, I beg to move.

Mr Hamududu: Mr Speaker, your Committee considered the Value Added Tax (Amendment) Bill, N.A.B No. 10 of 2014. In doing so, various stakeholders were invited to appear before it to make written and oral submissions. I will now highlight some of the findings and recommendations of your Committee.

Mr Speaker, your Committee interacted with various stakeholders who raised concerns regarding this Bill. Some stakeholders were concerned that reducing the filing period for returns to five days will add unnecessary pressure on businesses as they would need to meet various reporting deadlines within a short period of time.

They argued that employers would be required to submit returns to the Pay-as-You-Earn (PAYE) and Value Added Tax (VAT) returns on the fifth day. Further, the National Pensions Scheme Authority (NAPSA) returns will be required to be paid on the tenth day of the month. This is in addition to carrying out other month-end accounting procedures.

Mr Speaker, other witnesses were concerned that the administration of the Value Added Tax (VAT) Rule Number 18 had remained unresolved. They were of the view that failure to resolve it would adversely affect the growth of the export sector. They lamented the challenge to obtain importation documents as proof of importation in most of the export markets, particularly the Democratic Republic of the Congo (DRC), which is one of Zambia’s key export destinations.

Sir, in noting the concerns raised, your Committee is concerned that the Government has not yet resolved the administration of VAT Rule Number 18 with exporters. It is of the view that the continued delay to resolve the problem will continue to have adverse liquidity repercussions on exporters, thereby, depriving the country of the much needed foreign exchange.

In light of this, Sir, your Committee recommends that the Executive should amicably resolve the administration of VAT Rule Number 18 expeditiously.

Mr Speaker, your Committee also observes that Clause 3 seeks to amend Section 6 which provides for, among others, bringing forward the due date for manual submission of returns to the fifth day of the month from the twenty-first day, following the period the return falls due. Your Committee agrees with the concern raised by witnesses that it will be cumbersome for employers to meet various deadlines within the proposed time.

Sir, in this regard, your Committee recommends that the dates for submitting returns should be harmonised to the 10th of every month. This will make it easy for employers as they are also required to submit returns to the National Pension Scheme Authority (NAPSA) on the tenth day of the month.

Sir, we are honoured to be your Committee on Estimates.

Mr Speaker, I thank you.

Mr Chikwanda: Mr Speaker, I wish to thank the Committee of Estimates and hon. Members for supporting the Bill. I also wish to dutifully note the observations made by the Committee as well as issues raised by other legitimate stakeholders. May I now take this opportunity to respond to some of the concerns.

Sir, I have taken note of the recommendation by the Committee on Estimates that some exporters are concerned that they are not able to get VAT refunds due to non-compliance with VAT General Administrative Rule No. 18 on proof of exports. The Government remains committed to ensuring that this matter is resolved amicably, but expeditiously without unwarrantable delay so that the cash flow position of affected exporters improves. I also informed the House during the Policy Debate on the 2015 Budget that the Government is constrained to take any quick affirmative action on this matter because of the legal proceedings that have been commenced in the courts of law against the Government by some of the mining companies which are calling for expedition in the resolution of this issue at the same time.

Mr Speaker, concern has been raised relating to the proposal to bring forward the due date to the fifth day of the month from the twenty-first day of the month for manual submission of VAT returns. I wish to clarify to the House that tax payers will have two options were a return with less than ten transactions is to be submitted to the Zambia Revenue Authority (ZRA). Finally, such a return may be manually submitted, but within five days of the ensuing month. Secondly, where such a return is submitted electronically, the due date will still remain the twenty-first day of the following month. This has been proposed to ensure that efficiency for processing VAT returns and revenue collection is enhanced.

Sir, this Bill is straight forward and I, therefore, accordingly recommend it to the House.

Mr Speaker, I beg to move.

Question put and agreed to and the Bill read a second time.

Committed to a committee of the Whole House.

Committee on Wednesday, 17th December, 2014.

_____________

HOUSE IN COMMITTEE

[THE DEPUTY CHAIRPERSON OF COMMITTEES in the
Chair]

THE PROPERTY TRANSFER TAX (Amendment) BILL, 2014

Clauses 1 and 2, ordered to stand part of the Bill.

Title agreed to.

THE ZAMBIA REVENUE AUTHORITY (Amendment) BILL, 2014

Clauses 1 and 2 ordered to stand part of the Bill.

Title agreed to.

THE LOCAL GOVERNMENT (Amendment) BILL, 2014

Clause 1, 2, 3 and 4 ordered to stand part of the Bill.

Title agreed to.

______

HOUSE RESUMED

[MR SPEAKER in the Chair]

The following Bills were reported as having passed through Committee without amendments:

The Property Transfer (Amendment) Bill, 2014

The Zambia Revenue Authority (Amendment) Bill, 2014

The Local Government (Amendment) Bill, 2014

Third Readings on Wednesday, 17th December, 2014.

______

MOTION

ADJOURNMENT

The Minister of Transport, Works, Supply and Communication, Chief Whip, and Acting Leader of Government Business (Mr Mukanga): Mr Speaker, I beg to move that the House do now adjourn.

Question put and agreed to.
_________

The House adjourned at 1558 hours until 1430 hours on Wednesday, 17th December, 2014.

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Debates - Tuesday 16th December, 2014

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