Friday, March 04, 2011

Enforce taxation on mines - World Bank

Enforce taxation on mines - World Bank
By Mutale Kapekele
Fri 04 Mar. 2011, 04:00 CAT

WORLD Bank senior economist Julio Revilla says Zambia needs to improve its technical capacity to enforce taxation on the mines. And the World Bank has launched a new support programme for Africa which will focus on improving the continent's competitiveness and employment, vulnerability and resilience as well as governance and public sector capacity.

Responding to questions from journalists at the launch of the Bank's strategy for Africa, Revilla said the major economic problem Zambia had was growth led by a single sector.

He said there was need to redistribute copper resources through taxation to help other sectors develop.

Revilla said to do that, Zambia needed to improve its technical capacity to enforce taxation.

Currently, the multi-billion dollar rich miming sector only contributes about nine per cent to the Gross Domestic Product and less than three per cent to the country's tax revenue.

He also advised the country to convince investors in the mining sector to re-invest their profits locally.
“It is happening all over the world (investors externalizing profits).

The (mining) sector can contribute more to the country if the government convinces them to reinvest their profits within the country,” said Revilla.

“The revenue should be translated to other sectors such as tourism that could grow with increased funding. The Bank is working with the government to improve revenue collection from the copper sector. The country should improve its business environment which will make the country more attractive and both foreign and domestic investors will invest their money here.”

And World Bank vice-president for Africa Region Obiageli Ezekwesili yesterday announced the new assistance strategy for Africa with layout in three main business lines.

"We are excited about Africa's future. Today's Africa is exemplified by the many success stories and stronger economic growth being driven by the dynamism of its people and economies. We therefore used the opportunity of our new Africa Strategy to listen, learn and define how we could better support the continent's aspiration as it maintains the momentum of economic reforms over the next decade,” Ezekwesili said during a press briefing.

"In implementing the Strategy, the World Bank Group shall remain fruitfully engaged with citizens as they demand greater participation in the benefits of improved economic performance, deploy our partnerships, knowledge and finance to work with governments, private sector, civil society and other partners and help countries to speed up the attainment of the MDGs, expand economic prosperity and reduce poverty."

The plan, titled “Africa's Future and the World Bank's Support to it”, shifts from a more general focus on seeking economic stability and sound fundamentals to emphasising the need for attention in three key areas of competitiveness and employment, vulnerability and resilience as well as governance and increasing public sector capacity.

The Bank says it will also work directly with African governments to help them improve their systems and capacity to deliver basic services and manage accounts.

Significantly, the new strategy reverses the order of importance of the Bank's instruments to support Africa.

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