Maravi

NGO advises transparency on mining tax system

NGO advises transparency on mining tax system
By Kabanda Chulu in Kitwe
Mon 10 Jan. 2011, 04:00 CAT

PUBLIC discontent with the mining tax system will only be alleviated if the culture of secrecy around mining is removed to allow for greater transparency, says the Centre for Trade Policy and Development (CTPD). And the CTPD has advised the government to suspend or revoke mining licences of non-tax compliant mining companies.

The civil society organisation also challenged the government to urgently resolve legacy issues related to the development agreements and adherence to the current tax regime.

In its report titled ‘A Fools Paradise? Zambia’s Mining Tax Regime’, CTPD stated that now was the time for the government to raise more mining tax revenue and invest it in economic infrastructure for Zambians to benefit from the country’s wealth.

It observed that the government had allowed hundreds of billions of kwacha in tax revenue to be foregone by repealing the windfall tax in 2009.

“A modified version of the revenue based windfall tax should be re-introduced and the mining tax regime needs to be tightened in other ways especially by no longer allowing mining companies to offset hedging transactions against income,” it stated.

“The communities which bear the brunt of mining’s social and environmental impacts must get a fairer distribution of mineral royalties and this way public discontent will be reduced if the secrecy around mining is removed to allow for greater transparency.”

It challenged the government to implement the mineral revenue sharing mechanism as stipulated in the mining and minerals Act.

“Government should be more transparent about how mining tax regime is formulated including full transparency and accountability on tax revenues and tax expenditures and government should articulate a clear vision of what constitutes fair participation by the state in the fruits of the mining enterprise,” it stated.

“This should entail a detailed and publicly available assessment of the full mining tax regime including a detailed cost benefit analysis of all tax exemptions and incentives for mining companies.”

Labels: NGOs, TRANSPARANCY, WINDFALL TAX

posted by MrK @ 7:10 AM