Group warns high taxes eroding K500 pay rise for civil servants

The Acton Institute for Policy Analysis Centre (AIPAC) has cautioned that high taxation is diminishing the benefits of the recently announced K500 pay rise for civil servants.

AIPAC Executive Director, Solomon Ngoma, stated on Friday that the economic environment necessitated sustained efforts to restore macroeconomic stability, achieve debt sustainability, and foster inclusive growth.

In a statement issued in Lusaka, Ngoma highlighted challenges facing Zambia’s economy, including sluggish real GDP growth projected at 2.3 percent in 2024.

“The drought has caused substantial crop losses and reduced electricity production, exerting pressure on the current account due to lower exports and increased imports of maize and electricity,” he noted.

Ngoma called on the Ministry of Finance and National Planning to convene an inclusive indaba involving stakeholders, traditional leaders, and experts to address the country’s economic challenges.

“This platform will allow for a thorough analysis of Zambia’s economic situation, practical solution identification, and the development of targeted policies,” he said.

Ngoma urged the government to implement fiscal prudence, consolidate sustainable fiscal measures, and review tax policies to ease the burden on civil servants.

“Economic diversification, improved revenue collection, and enhanced public financial management are also essential,” Ngoma added.

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