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(LUSAKATIMES) ZRA directs mining firms in Luapula to pay tax

ZRA directs mining firms in Luapula to pay tax
Monday, April 20, 2009, 19:58

Zambia Revenue Authority, ZRA, has directed mining companies operating in Luapula Province to comply with tax payment regulations for various mining activities. And ZRA would soon conduct a tax audit for the large tax payers such as mining companies to ascertain tax compliance in the country.

ZRA Commissioner, Criticles Mwansa, revealed that some mining companies in the province were evading tax for extracting and selling minerals in Luapula Province. Mr. Mwansa issued the directive during a ZRA interactive meeting with mining firms and individuals which discussed taxation in Mansa.

The meeting was an initiative by the ministries of Mines and Finance and national planning and ZRA to educate manganese mining companies in Luapula Province about the taxes that they were under obligation to pay for their involvement in mining.

Mr. Mwansa observed that mining companies especially those in the small scale category in Luapula Province were not complying as most of them were evading tax.

The ZRA Chief added that as a result of not capturing the category in tax remittance, government was losing out on revenue from its minerals being mined by some of the mining firms in the province.

He said although the Zambian economy was diversifying, mining was still a major tax contributor to economic growth, hence the need to harness it in order for government to obtain the much needed revenue for national development.

He said mining falls in the large tax category which contributes over 80 per cent of tax to government hence the need for total compliance by those involved in the activity.

Mr. Mwansa said ZRA would ensure that it nurtures the large tax payer group especially those involved in natural resource extraction such as mining so that the country gets what was due to it to improve the living standards of its citizenry.

“This meeting is an initiative of the ministries of Mines and Finance and ZRA to create mutual understanding between us and tax payers so that we create a level were tax payers feel guilty when they fail to comply,” Mr. Mwansa said.

Meanwhile, Mr. Mwansa said ZRA will soon conduct a tax audit for the large tax payer group in the country to ascertain their tax compliance.

Mr. Mwansa said the audit would ascertain and enable ZRA find out existing loopholes for non compliance by those in the large tax band.

He said all companies involved in mineral extraction and selling to foreign markets would be captured in the tax audit and that ZRA will impose stern action against companies that will be found not adhering to their tax obligation.

“This audit is not aimed at faulty finding but at redressing the problem of non tax compliance and make the procedures amenable to pay tax, but let me also warn that we will deal with offenders sternly,” Mr. Mwansa said.

And Mr. Mwansa has urged Small Scale mining companies in Luapula province to take advantage of government incentives under the Zambia Development Agency, ZDA, to expand the businesses.

Mr. Mwansa said small companies could also merge to form conglomerates thereby increasing on their capital and investment to increase their profit margins and reap more from their activities.

Meanwhile, miners in Luapula Province have challenged the ministry of Mines to smoothen and re-organize the mine license issuance process to curb illegal mining in the area.

One of the miners, Paul Kalwa, said many mining firms had failed to comply with ZRA because they were operating illegally as they were not registered with the ministry of Mines and other relevant wings of government.

Mr. Kalwa said there was need for government to firstly conduct an audit of mining firms to ensure that only licensed companies were involved in mineral extraction in the province.

He said many local mining companies in Luapula Province had no mining licenses and were trading in the names of some other legal mines to which they sell the minerals.

“This problem is how do we pay taxes when we are operating illegally, that will be as good as exposing ourselves… We are appealing to the government to coordinate the process by first ensuring that the fragmented small scale mining firms are captured through normal registration,” said Mr. Kalwa.

He appealed to government to move in and restrain illegal mining which he said was on an increase in Luapula Province saying government would continue to lose income in form of taxes and royalty payments because of non compliance of illegal miners operating in the area.

Mr. Kalwa said there was need to ensure that mining activities in Luapula Province were regulated and conducted in a coordinated manner if government and its people were to benefit from the vast mineral endowments in the area.

Meanwhile, Luapula Base Metals Executive Director, Kennedy Sakeni, appealed to government to facilitate the growth of the mining sector in Luapula province by increasing and improving electricity supply to the area.

Mr. Sakeni said this will allow companies to construct refineries and smelters to add value to the minerals being mined in the area.

He noted that government was losing a lot of revenue from the minerals in the province because companies were not adding value to the minerals and were exporting them in raw form.

Mr. Sakeni, who is also former Provincial Minister, said his company and others were ready to set up smelters and refineries in the area but were prohibited by insufficient electricity power supply.

ZANIS/CB/ENDS/SJK

Labels: CHRITICLES MWANSA, FDI, TAXATION, ZRA

posted by MrK @ 10:05 PM