Wednesday, February 22, 2012

Government empowers BoZ to check mineral volumes

Government empowers BoZ to check mineral volumes
By Kabanda Chulu
Wed 22 Feb. 2012, 12:00 CAT

FINANCE minister Alexander Chikwanda has signed a statutory instrument that will give Bank of Zambia powers to check actual volumes of minerals declared by mining companies before exportation.

And Zambia Revenue Authority (ZRA) Commissioner General Berlin Msiska has said 20 mining metallurgists and engineers will be recruited this year to help the institution in auditing the mines in order to enhance revenue collection.

Many reports undertaken by various organisations have revealed that several mining companies under-declare the tonnage of mineral production, especially copper, in order to avoid paying the right amount of taxes.

Speaking after a familiarisation tour of ZRA offices in Lusaka, Chikwanda said the government agencies must be able to quantify the volumes and tonnage of minerals declared by the mines.

"ZRA will now be able to enforce this statutory instrument (SI) since it gives legal authority to BoZ to determine what is been exported by weighing commodities at weigh bridges so ZRA and the Central Bank will have powers to execute their functions and this is the first step because the ministry of mines will also have to issue an SI to collaborate with what we have issued," Chikwanda said.

"But most mining companies, I believe make honest declarations so this is just a precaution in case some are led into cheating so this SI is to give legal means to government wings to quantify things in a way which is appropriate."

When asked to comment on the investigations which government launched after Action Aid disclosed that Mopani Mines has been avoiding taxes through transfer pricing and other financial tricks, Chikwanda said it was not good practice to discuss issues about companies in the media.

"I prefer asking them to come to my office to discuss things because government ministers control instruments of power hence we should act considerably besides we have legal right to impose taxes but I shall not discuss individual companies it is unethical and as policy makers we expect executing arms like ZRA to implement the policies," he said.

Earlier, Chikwanda addressed ZRA employees and urged them to emulate the spirit of team work exuded by the national football team at the Africa Cup of Nations.

"ZRA has a huge responsibility and government will support it but there is need to work together in order to enhance revenue collection and I am hopeful that even this year ZRA will surpass the target of collecting the target of K20 trillion as they did last year when they collected K18.9 trillion from the target of K15.3 trillion," said Chikwanda.

And ZRA union representative Kalenga Musonda said the government should fund ZRA according to the budget plans that were submitted.

"Government should consider reverting to the percentage terms when funding ZRA so that the institution gets according to what it collects and we are happy that a ceiling has been removed because it made negotiations difficult", he said.

And Msiska said ZRA, last year, collected K1.7 trillion in mining tax arrears that arose when the mines protested the windfall tax.

"In 2012 we are not expecting to collect much of arrears from the mines since the bulk of it was collected last year and we intend to increase the number of auditors under the mining unit from the current seven to 20 and amongst the 20 we shall recruit metallurgists to provide that specialisation on how we should assess what actually comes out to be sold by these mines," said Msiska.

"We have a running agreement with the Norwegians who are supporting us through IMF, who shall come to build capacity in the mining unit so we are getting prepared to deliver right services by carrying out effective, efficient and professional audits in the mining sector."

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