Maravi

ZRA begins audit of mining operations

ZRA begins audit of mining operations
By Chiwoyu Sinyangwe
Thu 29 Oct. 2009, 04:00 CAT of the global financial crisis which hurt economic activity.

REVENUE earnings for the country were below target by K574 billion during the first eight months of this year to K7 trillion on the backdrop of effects

And Zambia Revenue Authority (ZRA) has started auditing Konkola Copper Mines (KCM), Kansanshi Copper Mines and Mopani Copper Mines (MCM) to verify their books of accounts for administering the variable profit tax.

During the period under review, ZRA was targeting to collect net taxes of K7.6 trillion but collected only slightly above K7 trillion.
Gross taxes were recorded at K8. 7 trillion while the refunds stood at K1.6 trillion.

“This outturn was largely on account of poor performance of trade taxes,” ZRA commissioner for domestic taxes Wisdom Nhekairo told journalists during a press briefing yesterday.

“The lower than projected revenue collection in trade taxes is largely attributed to the rapid depreciation of the kwacha against major currencies during the earlier part of the year making the cost of importation almost prohibitive, and the slowdown in economic activities in the country on the backdrop of world financial crisis. As a result, the levels of imports coming into the country drastically reduced during this period compared to the same period last year.”

He said ZRA undertook measures that increased audits of the taxpayers’accounts in different sectors of the economy in a quest to mitigate the impact of the secondary effects of the global financial crisis which mainly hurt the trade taxes.

“These audits enable us to improve revenue collections from inland taxes, a situation that we believe is more dependable and sustainable for the country,” he said. “We also increased our debt collection efforts in a bid to mitigate the impact of crises on public revenues.”

And Nhekairo said ZRA had started auditing a composition of both low and high cost mining operations to determine how the projects were differently affected by the international copper price.

He said following the abolishment of the windfall tax and introduction of the variable profit tax, ZRA needed to audit the mines as a way of verifying their tax books of accounts as well as raising the capacity of the country’s revenue body.

ZRA’s pilot audit of the mining companies which started last February with the help of Norway was expected to end next month.

“This mining tax audit is indeed for the new mining tax regime introduced this year after the government amended the mining regime of last year,” said Nhekairo.

During the months under review, mining company taxes based on provision payments were below target by K13.2 billion having recorded an outturn of K212.1 billion against a target of K225.3. And mineral royalty revenue collections were above target by K59.3 billion having registered an outturn of K167.4 billion against a target of K114.5 billion.

Labels: AUDITING, MCM, ZRA

posted by MrK @ 3:23 PM