No tax hike - Matambo

Minister of Finance and Economic Development, Kenneth Matambo has dismissed claims that he is planning to increase taxes. Matambo was responding to various reactions to his Budget Speech which he delivered beginning this month. Matambo this week stated that people jumped into making conclusions of the taxation matter.

In the budget speech Matambo said with mineral revenues declining and those from Southern African Custom Union (SACU) being volatile, there is an urgent need to diversify revenue base towards more sustainable and reliable sources.
“To this end, my ministry is considering proposals by the Taxation Review Committee of how to diversify the government revenue base. These proposals include adjusting various taxes, levies, permits and licenses and reviewing some tax expenditures such as VAT exemptions”.

This prompted impassioned calls from various quarters for government not to increase tax. Some MPs during their debates on the budget speech said it would be cruel for government to increase taxes while there has not been salary adjustment for public servants. The tax increase especially VAT, said economists, would have a negative impact on households.“I never said we are increasing taxes. I said we are reviewing tax structures. Given the trend of annual high expenditure we have to diversify our sources of revenue. If we do not do that, then it would mean the option we have is to restrict our expenditure, which is not a good thing. We have to seriously look at how to increase revenue. One or two taxes could be increased but I would be looking at proposals by Taxation Review Committee carefully,” explained Matambo reiterating that he is not going to make any increase.

Matambo said there is need to increase revenue to meet expenditure. He called on MPs to work with his ministry in coming up with suggestions on how to increase revenue without increasing taxes. “Tax review could also mean reduction. If you take for instance issues of Special Economic Zones there could be reduction of taxes in such areas. We can apply lower taxes in areas like Selibe Phikwe for a special purpose like economy growth and creation of employment,” said Matambo who was responding to MPs' debates on the budget speech. Matambo also took a swipe at opposition MPs accusing them of not reading the budget speech but rushing to oppose everything. He said except for MP for Gaborone Bonnington South Ndaba Gaolathe, the MPs concentrate on dismissing everything. He stated that he used to take Parliament seriously and listened attentively to debates but no longer does.

“I used to seriously take notes when MPs debate, hoping that I would reap something from opposition MPs. I have stopped taking notes because their debates have been turned into tactics of asking for votes. They just oppose and distort what is in my speech so as to appease members of the public.” Matambo also stated that his statement on employment creation has been distorted. The minister explained that what he meant was that it is not government’s primary role to create employment and not that government does not play a part. He said failure by opposition MPs to read has contributed to them always stating that there is nothing new in the budget speech.

“They say the policies and programmes have been mentioned before. It should not be surprising that the programmes and policies keep on recurring as they were discussed in State of the Nation Address and National Development Plan 11. These three are interrelated. People will keep on hearing about these programmes and policies each year because they fall under a six-year Plan.” He also condemned MPs who argue that government priorities are misplaced. Matambo said there is alignment between resources and priorities. He explained that resources allocation is made so that priorities could be achieved as stated in NDP11.