Friday, February 08, 2008
By NKOLE CHITALA
ECONOMIC consultant, Bob Sichinga, says mining companies must contribute a lot more than the anticipated K1,660 billion (US$415 million) indicated in the national budget. Mr Sichinga noted that the estimated income from the mining sector fell far short against a turnover estimated at K18,800 billion. He said tax contribution from the source would represent a paltry 9.6 per cent effective tax rate.
“Mining companies must contribute a lot more than indicated in the budget measures at US$415 million equivalent to K1,660 billion. The estimated income still falls far short against a turnover estimated at K18,800 billion,” he said.
Mr Sichinga was speaking during the Zambia Institute of Chartered Accountants (ZICA), Chartered Institute of Management Accountants (CIMA) and Association of Chartered Certified Accountants (ACCA) post 2008 National Budget Tax Review workshop in Lusaka recently.
Zambia Revenue Authority (ZRA) commissioner-general, Chriticles Mwansa reiterated that it expects to collect US$415million from the mining sector this year.
“This money is what would be earned from the new tax system, we have been collecting tax from the mines, but we are expected to collect US$415 million from the measures that were announced,” Mr Mwansa said.
He also said that small-scale miners were not left out in the new tax system.
He said he was certain that with small-scale mining companies making concentrates, this would result into positive effect to the national economy.
Mr Mwansa said the organisation was also working closely with the registrar of companies, National Authority Pension Scheme Authority and local councils on capturing information on companies and individuals that should pay tax.
Zambia Chamber of Commerce Trade and Industry (ZACCI) commended Government at the workshop for allowing mortgage interest to be deductable for tax purposes saying the move would encourage home ownership.
Chief executive officer, Justin Chisulo, said ZACCI welcomed the positive measures on percentage on savings and Withholding Tax, trailers, export levies, books, infant formula, reduction in value added tax rate, Pay As You Earn, domestic and external debt payments and import cover of 3.6 months.
Meanwhile the Zambia Association of Manufacturers (ZAM) expressed disappointment over national budget.
The association said most of the budget proposals submitted to Ministry of Finance and National Planning were not considered.
ZAM president, Dev Babbar said there was need for Government to reduce the cost of production and doing business in the country.
Mr Babbar cited the proposal on duty reduction on raw materials, forestry equipment, shoe manufacturing materials, paints, among others as some of the submissions that were not considered.