THE Zambia Federation of Employers (ZFE) has said the National Pension Scheme Authority (NAPSA) penalty charge of 20 percent makes doing business in Zambia unattractive.
ZFE director Guy Phiri told a parliamentary committee on economic affairs, energy and labour on Tuesday that the NAPSA penalty charge should be reduced to five percent to make investing in Zambia more attractive.
Mr Phiri said the prevailing NAPSA penalty charge is too high and it does not add value to job creation and, ultimately, this has an adverse effect on economic growth.
He said employers find it difficult to pay penalties and their employees because the percentage is too high.
â€œThere is need to revise the 20 percent penalty fee as it has had a negative impact on many businesses, and if not properly addressed, many businesses will shut down and this will contribute to high levels of unemployment,â€ he said.
â€œThe 20 percent is too high and can cripple a company. In many instances the income bases of a lot of companies are low compared to the penalty,â€ he said.
Mr Phiri said the penalty should equal the offence and should be in line with the rate of inflation.
â€œIf, for example, a company owes a huge liability, it will have difficulties in paying and will opt to close and open under a different name,â€ Mr Phiri said.
Mr Phiri said a reduction in the penalty will promote a favourable business environment and more businesses will come on board and create jobs.
He said ZFE is working with different co-operating partners like the National Economic Advisory Council to ensure the safety of various businesses in the country.
In response to a question from Kasama Central member of Parliament Geoffrey Mwamba, Mr Phiri said ZFE is asking Government to revise the penalty now to save businesses from shutting down.