Maravi

Tax compliance by mines still an issue - Mutambo
By Gift Chanda
Thu 20 June 2013, 14:00 CAT

TAX compliance by mining companies operating in Zambia is still a huge challenge, mines permanent secretary Dr Victor Mutambo said yesterday.
Dr Mutambo, however, said the government was acting to curb the trend.

The 3rd edition of the Zambia International Mining and Energy Conference and Exhibition (ZIMEC 2013) which opens in Lusaka today, gives an opportunity for investors to realise the country's mining potential and at the same time the challenges the industry faces.

The event, which is organised by the Association of Zambian Mineral Exploration Companies (AZMEC), in partnership with the Zambia Chamber of Mines and AME Trade Ltd, will see international investors, industry experts, Zambian decision makers, development partners and donors, as well as other key actors and partners in Zambia's extractive industries discuss key issues in the sector including taxation.

Dr Mutambo said policy changes the government was currently taking in the sector were inspired by legitimate grievances such as benefits not trickling down to ordinary Zambians.

"For Zambia, if we are to achieve the much-needed development, we need to ensure that we put a proper monitoring mechanism so that what we get from our ground is properly monitored and accounted for," Dr Mutambo said.

Experts argue that weak tax laws mean little revenue is collected and the government has accused mining companies of lacking transparency in their operations.

Data shows, for example, that much of Zambia's exported copper is destined for Switzerland but little of it shows up in Swiss customs figures.

That is because it only moves there on paper. For tax evasion purposes. Of course, Glencore International (Mopani) has it's HQ in Switzerland. Nat Rothschild now has Swiss nationality. - MrK

According to a report last year by US anti-graft watchdog Global Financial Integrity - which highlights how resource wealth is often squandered in the developing world - almost US $9 billion has been illegally siphoned out of Zambia.

The amount is almost half of Zambia's current gross domestic product.
Dr Paul Zambezi, former science and technology permanent secretary, also questioned how much the country was reaping from other commodities like gold.

He felt that the country could actually reap more revenue from gold than copper.

But Dr Mutambo said the government also intends to tighten its grip on its share of profits from gold extraction as it tries to boost compliance and tax revenue collection.

Last year, the government introduced guidelines for mineral exports to allow state agencies to verify weight and content to enhance transparency.

The government also plans to monitor the flow of money in and out of the country.

Zambia collected K4.4 billion a (US$830.1 million) in mining taxes in last year, compared with K3.3-billion the year before.

Labels: AZMEC, TAX EVASION, VICTOR MUTAMBO

posted by MrK @ 2:56 PM