SPARE BUS OWNERS

IT is not too late for Government to review and do away with its plans to increase tax for bus owners.Government has announced an increase in taxes for bus owners, set to take effect in the upcoming year, as part of efforts to address the economic challenges brought on by the prolonged drought conditions expected to affect the country into 2025.The move, quite apart from making the government unpopular will also result in making travelling more expensive for the vulnerable who are the hardest hit by the drought.If anything, the increased tax will destroy what has been achieved through the years of having an efficient and affordable passenger transport sector.It should be noted that the country’s passenger transport sector has been one of the most successful in which Zambians have invested heavily.This success is anchored on the liberalisation of the country introduced by the country’s second president, Mr Frederick Chiluba when the Movement for Multiparty Democracy removed unseated Kenneth Kaunda’s UNIP government in 1991 with its commandist economy.President Chiluba’s administration opened the passenger transport sector, then dominated by the State-owned United Bus Company of Zambia, by removing tax on the importation of passenger vehicles.That move opened the economic doors for Zambians from all walks of life to venture into the passenger transport business and fulfilled one of the MMD’s campaign promises – to make buses wait for passengers than what was obtaining, people spending days on end at bus stations waiting for a bus to their destination, especially rural areas.That is what Zambians have continued to enjoy to this day, with buses operating throughout the country, and in their own small way making a contribution to the country’s economy.But we doubt whether the proposed taxes will help grow the economy rather than stifle growth of the passenger transport sector.Previously, bus owners were taxed based on presumptive income, with rates determined by the seating capacity of each bus. However, the new system will see a change in tax rates, with the adjustments reflecting a higher burden on bus owners with larger fleets.According to the minister of Finance and National Planning, Dr Situmbeko Musokotwane, the newly adjusted tax structure is aimed at boosting government revenue to mitigate the impacts of the drought and strengthen the country’s resilience during tough economic times.Dr. Musokotwane outlined the revised tax structure, detailing the increases for various bus categories. “For buses with a seating capacity of 64 seats or more, the annual tax will rise from K12, 960 to K15, 552. Buses with 50 to 63 seats will see an increase from K10, 800 to K12, 960 per year, while buses with a capacity of 36 to 49 seats will face a rise from K8, 640 to K10, 368,” he said.He said smaller bus owners with a capacity of 22 to 35 passengers will be taxed more than K7, 000.“Smaller buses with a seating capacity of 22 to 35 passengers will now be taxed K7, 776 annually, up from K6, 480, while buses with seating for 18 to 21 passengers will see an increase from K4, 320 to K5, 184. For the smallest buses with fewer than 12 seats, the annual tax will rise from K1, 080 to K1, 296.“Finally, the buses below 12 seats, the tax currently is K1, 080 per year to K1, 296 per year. These tax adjustments are very moderate. We are doing this to help sustain the lives of the people,” Dr. Musokotwane said.”And that is our worry. Rather than helping the vulnerable, it would have the opposite effect of making travelling expensive and those already in business failing to grow.