THE Budget and Finance Parliamentary Portfolio Committee yesterday thwarted Finance minister Tendai Biti’s efforts to have the House of Assembly pass three Bills saying the committee had been denied an opportunity to make recommendations on the proposed legislation.
Report by Veneranda Langa
Biti introduced the Micro Finance Bill, the Securities Amendment Bill and the Income Tax Bill to Second Reading Stage in the House of Assembly, but acting chairperson of the committee Eddie Cross protested and proposed the passing of the Bills be delayed until public hearings on the proposed legislation were done.
“When these Bills went to First Reading Stage, we requested that public hearings be done, but we were denied that opportunity due to financial reasons,” Cross said.
“We wanted to conduct public hearings before these three Bills are considered for Second Reading Stage as these Bills are important and complex and in terms of the Income Tax Bill, we have had written representations from several institutions raising serious issues regarding the way this Bill was crafted.”
However, Biti said it was unfair for Cross to block debate on the Bills without first consulting him about those concerns.
“The MP should have been fair with me and discussed with me before standing up and hammering me on the Bill,” Biti said.
“I gave notice for debate on the Bills in November last year. For the committee to say they did not have time to consult is unfair, especially since we have an election this year and we do not have the luxury of consultations on those Bills.”
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He said the Micro-Finance Bill will provide a regulatory and supervisory framework for the sector.
“It will deal with some nefarious practices by a few money lenders in this country who are charging exorbitant rates of interest that are crippling households,” said Biti. “ If you lend money and you are not registered, that transaction will be void and the legal effect is that if I borrow money from you and you are not registered, I have no obligation to repay it.”
He said the Securities Act needed revamping as it previously did not deal with white collar crime, adding there was also no justification of having a full time Securities Commission regulating only one market.
On the Income Tax Bill, Biti said the current Act was difficult to understand and needed to be simplified.
“The Income Tax Act is problematic in that it is very much in favour of business, in particular mining,” he said. “For individuals, our rate of tax is 35% to 42%, but if you look at the mining sector, the nominal tax rate is 25%, but the effective tax rate is 8%.”
Biti said the Bill will try to deal with “shenanigans in the banking and mining sectors where tax was manipulated on the basis of source”. He said the Bill will also deal with the issue of double taxation.
