Maravi

(STICKY) Sichinga bemoans loss of mining revenues

Sichinga bemoans loss of mining revenues
By Chiwoyu Sinyangwe
Thu 03 Feb. 2011, 04:01 CAT

BOB Sichinga says the country will continue to lose critical benefits from mining revenues as foreign mining firms continue to fund MMD secretly at the expense of taxes.

And Sichinga has challenged opposition political parties to anchor their campaigns in this year's elections on increasing the country's ability to benefit from surging mining revenues.

Foreign mining firms last year earned US$6 billion about K29 trillion in gross revenues from a record export of 822,676 metric tonnes of copper, the highest output in the country's history.

While revenues by mining firms rose by 79.6 per cent largely due to an upswing in the average price of copper on the international market, the country's Treasury only got K1.7 trillion – the revenue which includes arrears from the disputed 2008 mining fiscal regime.

Commenting on the revelations, Sichinga challenged finance minister Dr Situmbeko Musokotwane to disclose “where the variable tax is” as 2010 results revealed that mining taxes continued to contribute a paltry two per cent to the total tax revenue basket of the Zambia Revenue Authority (ZRA).

Sichinga said there was “something wrong” with the current regime which only allowed the country to get a paltry K1.7 trillion from the total mineral export revenues of K29 trillion by foreign mining firms last year.

“There is something wrong in the whole management of this important resource copper,” said the Lusaka business consultant. “For as long as the mining companies continue to provide pecuniary partisan benefits to the MMD at the expense of the nation, those benefits will continue to sway the minds of the current fiscal managers.”

Sichinga said there was no need of keeping in power a regime that was sacrificing its people over investors.

“I want to challenge political parties to make this a campaign issue,” he said.

“They should be able to go to the people and say 'if you vote for us, we shall get money from the mines than what the current government is doing.'”

He said the current regime was abating the deprivation of the country's resources by foreign mining firms.

Sichinga said the current contribution of the mining sector was not acceptable.
He called for the reintroduction of the windfall tax on copper mining.

“I want to challenge President Rupiah Banda and Mr Musokotwane – the economist - to show us where proceeds from the variable tax which they were talking about is,” Sichinga said.

“Since he Dr Musokotwane said the variable profit tax is better than the windfall tax, our question to him is 'let him breakdown the tax contributions of each tax and show us.”

He said the tax contribution of the mining sector in net terms was in negatives.

“This 2.2 per cent earnings the governor Dr Caleb Fundanga is talking about means even the mineral royalty at three per cent, they are not paying,” said Sichinga.

“Instead, the mining companies are getting more from ZRA than they are contributing.”

Labels: CORRUPTION, MMD, ROBERT SICHINGA, TAXATION, WINDFALL TAX

posted by MrK @ 4:49 AM