Maravi

‘It’s unnecessary to project mining expected revenue’

‘It’s unnecessary to project mining expected revenue’
Written by Chiwoyu Sinyangwe
Thursday, February 19, 2009 7:12:54 PM

ZAMBIA Revenue Authority (ZRA) Commissioner General Chriticles Mwansa has said it is unnecessary to give a projection of the expected revenue from the mines this year after an alteration to the 2008 mining fiscal regime.

In an interview, Mwansa said the projected US $415 million that the government expected to earn from the mining sector last year was used for evaluating the performance of the new taxes introduced.

Mwansa said this in the wake of some concerns that the government should make public the projected revenue earnings from the mining sector this year which was expected to decline on account of changes to the 2008 mining fiscal regime which has seen the windfall tax completely scrapped off and replaced with a variable profit tax.

He explained that revenues from the mining sector would be treated just like any other taxes. Mwansa however said ZRA would continue to make public revenues that would come directly from the country’s largest foreign exchange earner.

“In the current setup, it is not necessary because we have now reverted to the normal regime…the projections were made last year because we wanted to know how much would be collected and that is we put it aside,” Mwansa explained.

“But as we collect the taxes, we will be able to isolate that this is tax from mines. For example mineral royalty is specific to them (mining companies).”

Mwansa said any other ‘normal’ taxes attributed to the mining sector would be profiled together with other taxes such as the company tax, Pay As You Earn (PAYE) and the Value Added Tax (VAT).

But an economic expert who declined to be named said there was need for the government to clearly state the expected revenues from the mining sector this year, considering the significant drop in copper prices on the international market.

“I think the main taxes from the mining companies come from the royalties, corporate tax and income tax but I am sure they should be able to give a projection of the expected revenue from the mining sector,” the expert said.

“I don’t why they (government) shouldn’t…I am sure they should give that number and I am sure they must have the number and I am sure it must come out in parliament as they debate the budget.”

The expert also said it would be difficult for the government to fully appreciate the challenges facing the mining sector in the absence of the expected revenues from the mines.

“This is why the Extractive Industries Transparency Initiative (EITI) is very important so that every one gets much better information of what is really going on but I think there is a reasonable chance that they (mines) can avoid further redundancy but at the same time, they will recover,” explained the expert.

Labels: CHRITICLES MWANSA, EITI, MINING, TAXATION, WINDFALL TAX, ZRA

posted by MrK @ 8:22 PM