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(STEELGURU) Zambia avoided the collection of mining taxes during the H1 2010

Zambia avoided the collection of mining taxes during the H1 2010
Tuesday, 21 Sep 2010

It is reported that the deficit incurred by Zambia in the collection of mining taxes during the H1 of this year could have been avoided. Dr Mathias Mpande scholar at Zambia’s leading university said that the country should have maximized on the taxes due by mining companies than fail to collect more than USD 1.7 million owed government since the beginning of the year.

Dr Mpande a former deputy mines minister described as a great scandal’ by the Zambian government to fail to collect what is due to the nation in terms of taxes from the mining sector through the Zambia Revenue Authority, tasked to oversee taxation in various sectors including mines.

He said that Zambia Revenue Authority will not recover the ZMK 8.3 billion mining royalties’ deficit by the end of the year because it has no competent staff to handle the mines.

Dr Mpande said it would be impossible for ZRA to recover the ZMK 8.3 billion deficit in mineral collection royalties by the end of the year noting that the deficit had arisen because the mining companies were not paying as much royalties as they were supposed to pay.

He said that the mining companies as far as am concerned are transfer pricing, there is also rampant tax evasion and ZRA are not up to the mark to audit the mining companies books so that they can have a realistic assessment of what is due. He added that ZRA has just got to be capacitated and employ competent people who are competent in mining taxation. The current people they are employing people who have probably just done administration and economics.

Dr Mphande said that ZRA should employ people who have basic understanding of the mining industry so they could competently deal with issues of tax in the industry. He said that studies in economics and administration were not sufficient for ZRA staff to asses what the mining companies were doing.

He said that ZRA should employ people who are competent from mining areas as well and train them into accountancy and taxation. He claimed that ZRA officials would not understand how mining companies generate their revenue and how they conceal their costs.

Dr Mpande said that it was saddening and that the government was doing the country a disservice by covering the mining companies from paying the appropriate tax. That is a scandal as far as am concerned, the Zambian government is not doing the country a service, we are not getting what is due from our resources and that I have said on several occasions and that is true and it is increasingly getting worse.

The Zambian mining industry was the only industry that was large enough for the country to get revenue that would meaningfully contribute to tangible economic growth and development. He wondered how the government or administration that insulates the mining industry for a successive period of 10 to 15 years as if it’s a golden egg would get money.

He said that the Zambian economy was mine based and it was largely through mining that the country’s economy could grow and facilitate development. The low tax that government had allowed the mining companies was encouraging the mining companies to continue abstaining from what they were supposed to do.

Dr Mpande said that they are supposed to upgrade minerals and add value but as a consequence of this government is not adding value. The level that the of skills and development the country had gotten to, Zambia should have been exporting not less than copper cables, transformers and other finished products.

He said that its not possible (for ZRA to recover the K8.3 billion deficit) , the mining companies are contributing negatively to the country’s revenue, instead of paying, they sometimes get refunded via VAT a situation that they don’t even contribute, somebody who doesn’t pay tax gets money from you can you see that as sensible? That is what is happening to ZRA.

(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)

Labels: MATHIAS MPANDE, MINING, TAX EVASION, TAXATION, WINDFALL TAX, ZRA

posted by MrK @ 5:34 AM