ZEITI expert bemoans inaccurate production figures in mines
ZEITI expert bemoans inaccurate production figures in minesBy Misheck Wangwe in Kitwe
Thu 14 June 2012, 13:22 CAT
THE Zambia Extractive Industry Transparency Initiative says the country will never maximise its profits from mining if the PF government does not address illicit capital flaws being perpetrated by mining companies.
ZEITI expert Talent Ng'andwe said inaccurate declarations of copper, cobalt and emerald production by foreign mining firms was one of the major reasons sustainable economic development in Zambia had not been achieved for many years.
Ng'andwe said the argument the mining companies were putting up that they could not report production figures because some mining company's outputs were very low and were producing low grade copper should not be tolerated.
He said in the previous MMD regime, there were a lot of secrecy in mining production due to vested interests that made it difficult for Zambians to see tangible benefits from the mining sector.
He said the manner in which many mining companies were conducting business was tantamount to tax evasion as there was no transparency in their production.
Ng'andwe said a lot needed to be done in terms of government policy on mining to ensure that accurate revenue is collected from the country's mineral resources to enhance national development.
"Extractive companies like we have mines in Zambia, they are generating a lot of revenues which is failing to contribute to the growth of African economies, Zambia is an example and this is due to illicit capital flaws which are as a result of inadequate monitoring and tracking mechanisms. Our tax authorities, the ZRA must be present at the point of production," he said.
Ng'andwe said the main purpose of disclosing the revenue remitted to the government by the mining companies was to promote transparency and accountability in the use of natural resources to ensure that all citizens and mining towns benefit from the process.
He said stringent mining monitoring mechanisms, coupled with level headedness and responsible corporate citizenship from foreign investors in the mining sector, was critical to enhancing economic development.
"The PF government has a responsibility to make sure that they unbundle the secrecy that surrounded the mining operations during the previous regime and make sure they make mining companies account through initiatives like the EITI. If they compel mining companies to report the figures that they produce then the watchdogs who are civil society will be able to tell that the figures are accurate and the proceeds will enhance economic development," said Ng'andwe.
Labels: CHISELEBWE NG'ANDWE, EITI, MINING, TAX EVASION, ZRA
posted by MrK @ 3:54 PM
2 Comments:
just an example among others
and nothing was and IS done...
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According to NGOs in its 2010 pilot audit by Grant Thornton, Zambia and Econ Poyry, Zambia lost an estimated income of USD 175 million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.
copper from Mopani is sold under a contract with copper in one instance being sold at 25 per cent of official prices at LME. In other words, they are not paying taxes over 75% of the copper sold to Glencore.
"The auditors found that MCM resisted the pilot audit at every stage. The company's book-keeping was incomplete, several legally required documents were lacking and the general ledger analysis showed several loopholes and couldn't be matched with the trial balance," the organisations stated. "The auditors also found an inexplicable doubling in the costs of the company between 2005 to 2007, which shows that the company has been artificially inflating its costs to minimise the profits shown in their books so that they could pay less taxes. Despite the fact that the audit was finished in the fall of 2009, it was kept secret."
The former Zambian government has declined to investigate Mopani's tax affairs despite calls from development charities. "We are disappointed with the government's lukewarm reaction," said Savior Mwambwa, executive director of the Centre for Trade Policy and Development, Zambia. "They need to take action and change the whole taxation system."
"Zambia continues to lose on dividends from Mopani Copper Mines as the Glencore owned mine never declare any dividends to Zambia Consolidated Copper Mines InvestmentHoldings. During the period under review, Action Aid estimates that the Zambians government lost an estimated USD 50 million per year in undeclared dividends to ZCCM IH by Mopani.Copper Mines, according to Action Aid was avoiding declaring anydividends by ZCCM IH through transfer pricing and over statement of the costs."
Hi MikeTe,
You should check out the newest approach by the PF government:
(STICKY) Mines to provide detailed info
Mines to provide detailed info
By Kabanda Chulu in Lusaka and Edwin Mbulo in Livingstone
Mon 18 June 2012, 13:22 CAT
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