Levies cause more harm than good

Mmegi Editor | Wednesday September 23, 2015 16:39

Participants from the private sector shared their frustrations, and the inconveniences caused by these levies.

Speakers minced no words on what they deemed problematic ones, such as the UTC milk, wheat flour, alcohol, road safety, tourism and the BOTA training levies.  They, however, agreed that some, particularly the National Electrification Special Fund and the Road levies, were justified.

When some of these levies were introduced a few years ago, there was outcry that they were being used as forms of tax. There were also warnings that the levies were a breeding ground for corruption, and possible misuse of public funds by those assigned their management. Some commentators likened them to a scenario of robbing Tom to pay Jerry. The alcohol levy for example, has been linked to the high cost of commodities or inflation, especially that it was raised recklessly without consideration of other commodities in the basket. 

The objective of the alcohol levy has been discussed many times in the National Assembly, but no clear answers have been given as to what it is, what it intends to achieve, and whether there is a chance it will ever achieve that.

All the nation knows about the alcohol levy is that it has been transferred to the Ministry of Trade and Industry, has accumulated billions of pula, and the collections of which seem to be spent erratically.

One other levy that has failed is the plastic levy, for which funds have never been collected since it was introduced seven years ago. What this means is that the store owners have benefitted immensely from this levy, at the expense of the ordinary man. The way things are, it will be difficult, or even impossible for us to go back to the time when a plastic bag was an incentive from the store.

Of course not all levies are evil as the participants have pointed out and it is our belief that among them is training levy, which offers compensation to companies that train their employees to acquire better skills. It is therefore important for policy makers to take advise from industry players and get rid of levies that are detrimental to the country’s economic growth. Those levies that contradict the principles of good governance and accountability should also be set aside pending their alignment with the Constitution and other legislations.

Today’s thought

“No nation has ever taxed itself into prosperity.”

- Rush Limbaugh