Maravi

(TIMES ZM) Increase mine taxes – expert
Posted November 3, 2013
By JUDITH NAMUTOWE -

A LUSAKA-based economist Chrispin Mphuka has urged the government to reduce the rate of debt contraction and increase taxes from mines for more revenues.

Dr Mphuka said Zambia was increasing public debt at a fast rate, hence the need for sustained economic growth to have sustainable debt. He said this when he presented a paper on debt sustainability and a 2014 Budget reflection during the Economics Association of Zambia (EAZ) post-budget analysis breakfast meeting in Lusaka.

“We need sustained economic growth to have sustainable debt. Structural transformation must take place to ensure a more sustained growth,”

“So in the interim measures such as the 10 per cent export tax on copper concentrates are commendable as they encourage processing to ensure better prices.

“In my view copper blisters should equally be taxed. Only copper cathodes must not attract export tax,” Dr Mphuka said.

He said it was important to tax the mines more instead of contracting more debts.

Dr Mphuka said between 2002 and 2008, revenue from mine tax was 0.56 per cent of Gross Domestic Product (GDP), while the mines’ total earnings were close to 10 per cent of GDP.

This he said was due to over-generous tax concessions, under declarations because of fraud and a lack of capacity to monitor mining activities.

He said the only way forward in terms of resolving the problem was through revenue-based tax which he said was easier to administer and that it had stabilisers.

Dr Mphuka said the mines had over the years not paid enough in terms of taxes, hence the need for Government to consider coming up with revenue-based measures.

“Over the years, mines have not paid enough and this has come not just from me, but the International Monetary Fund (IMF), World Bank at one time and even cooperating partners.

“It is time that we sit down and see how we can tax the mines properly. And I believe the revenue-based tax is the best whether windfall or whatever, what is important is that revenue-based tax will be better in ensuring that mines declare accurate taxes,” he said.

Dr Mphuka said that debt sustainability also demanded that contracting of debt was done in a consultative manner, saying that Parliament should have the final say on what debts the country should have.

Dr Mphuka said Government’s policies should, however, be engineered at exporting processed goods.

Labels: CHRISPIN MPHUKA, MINING, TAX EVASION, TAXATION, WINDFALL TAX

posted by MrK @ 2:13 PM