Maravi

Govt seeks foreign help in mine tax collection

Govt seeks foreign help in mine tax collection
Written by Fridah Zinyama
Sunday, February 01, 2009 4:37:40 AM

THE government has sought for assistance from co-operating partners on how to improve tax collection from the mining companies in view of the challenges experienced in the past.

And finance minister Dr Situmbeko Musokotwane has said the K100 billion allocated to the Food Reserve Agency (FRA) in this year’s budget for the next crop marketing season is not enough to purchase all the maize that will be produced.

During a recording of the post-budget Culture Remodelling Programme on at Ministry of Finance offices in Lusaka yesterday, Dr Musokotwane said the government had sought assistance in handling taxes from the mining sector in order to properly utilise the resources that the country had.

“Collecting tax from the mining sector is not easy as there are a lot of processes involved,” he said.

Dr Musokotwane said the government would be in a better position to collect income taxes without any difficulties once it received the assistance from co-operating partners.

The government had in last year’s budget introduced the windfall tax on mining companies when copper prices were at their best. It has however scrapped it off this year due to poor prices of the commodity obtaining on the international market owing to the global economic meltdown.

The government’s intention was to ensure that the nation received a fair return from its resource, while maintaining a globally competitive mining industry but it has since removed the windfall tax and retained the variable profit tax which would capture any windfall gains that may arise in the sector.

And Dr Musokotwane added that this year’s allocation to FRA was not adequate to purchase all the maize that the country would produce.

He however said this was in order to allow the private sector have a more active role in the crop marketing season.

Dr Musokotwane warned that the government would not allow the private sector to hoard maize in order to hike prices as was the case late last year.

“Government cannot single handedly purchase all the maize that the country produces hence its desire to have the private sector play a more active role in the crop marketing system,” Dr Musokotwane said.

“But we will ensure that measures are put in place so that the public is not taken advantage of by the stakeholders in the sector to pay more for mealie-meal than is necessary.”

When asked whether government would this year continue to borrow, Dr Musokotwane said there was nothing wrong with borrowing if it was for purposes of growing the economy.

“We are however careful to borrow for productive purposes which will allow our economy to grow,” he said.

“We will consider concessional borrowing from our co-operating partners who demand for lower interest rates and give a longer period in which to pay back the funds.”

And on concerns about transparency and accountability, Dr Musokotwane said his ministry would closely work with the Office of the Auditor General in ensuring that public funds were prudently spent.

“Any suggestions that come from her office will be closely followed and if there are cases of misappropriation of funds and her office suggests further investigation and persecution, her suggestions will be implemented,” said Dr Musokotwane.

Labels: FRA, SITUMBEKO MUSOKOTWANE, WINDFALL TAX

posted by MrK @ 4:37 AM