Maravi

(LUSAKATIMES) Mining Sector contributing less than 2% of domestic revenue-ZCTU

COMMENT - Good article, however what the writer doesn't point out is that almost none of the taxes due by the mining industry are actually paid. Or dividends either. That is the problem, collectability and the government's unwillingness to actually collect, because they have been bribed.

Mining Sector contributing less than 2% of domestic revenue-ZCTU
TIME PUBLISHED - Friday, July 22, 2011, 8:45 am

ZCTUThe Zambia Congress of Trade Unions (ZCTU) has observed that the country’s current tax policy does not adequately support the redistribution of income, wealth and resources.

ZCTU first Vice President Crispin Munyukwa has acknowledged that mining is the mainstay of the country’s economy but noted that it pays very little in taxes and royalties.

Mr. Munyukwa says the country’s attainment of middle income status can largely be attributed to the increase in mining export receipts yet the sector only contributes less that 2 percent of domestic revenue.

He tells QFM in an interview that it is expected that government tax policy to be in line with the broader objectives of reducing poverty by strengthening redistributive policies.

Mr. Munyukwa has since appealed to government to consider revisiting the windfall taxes.

In Zambia, government has given a lot of incentives to mining companies in an effort to attract investors.

Exporters of copper and cobalt are levied 35% of taxable income whereas other mineral and “non-traditional” commodities (ie. excluding copper and cobalt) attract a levy of 15%. Companies listed on the Lusaka Stock Exchange are levied at 30% of taxable income.

Mining compnaies also pay a royalty fee calculated as 2% of the market value of minerals f.o.b. less the the cost of smelting, refining and insurance, handling and transport from the mining area to the point of export or delivery within Zambia.

In terms of relief, an investment in mining, including prospecting, attracts deductions from income tax on the following expenditures on capital expenditure; allowances of 25% on plant, machinery and commercial vehicles; 20% on non-commercial vehicles; 5% on industrial buildings.

A holder of a mining right is exempt from customs, excise and Vat duties in respect of all machinery and equipment required for exploration or mining activities.

[QFM/addition information from Ministry of Mines]

Labels: MINING, TAX EVASION, WINDFALL TAX, ZCTU

posted by MrK @ 7:02 PM