(MISA/IFEX) – The Government of Zambia has passed an amendment to the VAT Act, adjusting the standard rate applicable to the supply of newspapers and magazines resulting in revenue gains of K5.2 billion. Six media bodies have submitted that the new value added tax (VAT) measures should be immediately withdrawn in the interest of the […]
(MISA/IFEX) – The Government of Zambia has passed an amendment to the VAT Act, adjusting the standard rate applicable to the supply of newspapers and magazines resulting in revenue gains of K5.2 billion.
Six media bodies have submitted that the new value added tax (VAT) measures should be immediately withdrawn in the interest of the public. They contend that the proposed VAT on newspapers and magazines will have a negative effect on freedom of expression and access to information by the public.
This is contained in a submission to the Parliamentary Committee on estimates by the Media Institute of Southern Africa (MISA) Zambia, the Press Freedom Committee of the Post Newspapers, the Press Association of Zambia (PAZA), the Zambia Media Women Association (ZAMWA), the Society for Senior Zambian Journalists and the Zambia Union of Journalists (ZUJ).
The media groups stated that the development was “frightening”, considering that the country would go into presidential and parliamentary elections in 2006 and therefore access to information by members of the public was very important this year.
The media organisations were of the view that if the tax was upheld and legislated into law, it would be difficult for the media to meet their social obligations of informing the public.
The tax would increase the cost of production and reduce newspaper sales by up to 25 per cent. It would lead to the closure of some newspapers and magazine publishing companies.
The government should propose special incentives for the growth of the industry, instead of taxes on the newspaper and magazine industry, the media organisations noted.
At present, the parliamentary committee on estimates has referred the case of the media bodies’ opposition to the newly introduced VAT to the Parliamentary Committee on Delegated Legislation.
Estimates committee chairperson Emmanuel Hachipuka advised the media bodies that the case could not be heard by his committee because the VAT on newspapers was already in effect. In his explanation, Hachipuka said his committee only dealt with issues that were not yet legislated.
Hachipuka explained that finance minister Ng’andu Magande used his delegated authority to introduce the tax measure and in so doing had by-passed Parliament. Mwenya Bwalya, Parliamentary counsel in the Ministry of Justice, said the estimates committee could only take views on issues that had not yet come into force.
Hachipuka noted, however, that the committee took cognizance that the matter had been brought before them and would refer it to the speaker who would in turn refer it to the committee on delegated legislation. “We can ask Mr Speaker to add this matter to the schedule of the committee on delegated legislation,” he said.
Making the submission on behalf of the six media bodies, Press Freedom Committee chairperson Webster Malido said the introduction of VAT on newspapers would negatively affect free expression and public access to information.
He said media stakeholders want the VAT measures removed in the interest of the reading public.
Responding to a question raised by Chipata Central member of parliament Matthew Mwale who wanted to know if the media perceived this tax measure as a political move, Malido said the media did not want to believe it was a political move but it was in itself as a punitive measure both on the printing industry and the readers.
Responding to the Mambilima member of parliament who wanted to know if the media made submissions on what incentive they would want, PAZA vice-president Amos Chanda said the media had made submissions in 2003 and 2004 such as those given to the mining industry. He said incentives that had been recommended were the reduction or removal of tax on printing materials and the implementation of the Media Law Reforms. “Does the word incentive only apply to foreign investors?” he asked. And responding to a question from Hachipuka who said there may be a perception by the government that the private media was making profits due to the appearance of organisations, Post Newspapers general manager Michael Phiri said the private media should not be punished for their efficiency.
Phiri said the private industry’s acquisition of assets in its quest for efficiency should not cause theme to lose out. He said the perception by government that the private media was making profits should be backed by concrete information from the industry.
Chanda said if the newspaper industry was to charge the economic rate for the actual cost of newspapers, newspaper copies would cost not less than K12,000 (approx. US$3.7).
