CUTS advises review of mining tax system
By Gift Chanda
Fri 24 June 2011, 17:30 CAT
KEY measures should be instituted to prevent revenue leakages from the mining sector, says CUTS International Zambia.
Commenting on the recent decision by the Tanzanian Parliament to approve a US$27.4 billion five-year development plan that backs the introduction of a super-profit tax on mining companies, CUTS acting Centre Coordinator Simon Ngona said Zambia needed to review the whole mining tax system to achieve optimum benefits from the country’s mineral wealth.
He said it was important that the country instituted key measures that would ensure revenue leakages were minimised or completely sealed.
He explained that re-introducing windfall tax without addressing key challenges of taxation in the extractive industry would not be an ultimate solution to ensuring Zambians benefitted from the country’s mineral wealth.
“It is not a single line of tax that ensures a country benefits from its industries but the whole tax system and framework for that particular industry,” he said.
“The Zambia Revenue Authority (ZRA) is on record admitting that it does not have the capacity to properly tax the mines nor monitor their activities and recent mine audits have reviewed glaring tax evasion and avoidance efforts by the mining companies…”
Last week mines minister Maxwell Mwale told Reuters that the government would audit more mining companies after previous audits turned up as much as US $200 million in unpaid taxes from the key economic sector.
Mwale said the government was still owed by Mopani Copper Mines in unpaid tax.
A recent audit on Mopani early this year revealed glaring irregularities and inconsistency in production and revenue figures that the mining company submits to ZRA for tax administration, most of which hinge on its links to Glencore AG.
Revelations of the audit sanctioned by the government with the aid of some cooperating partners also revealed the country’s lack of capacity to verify records submitted by mining firms to ZRA for tax administration.
It stated that the taxes being paid by mining firms in the country were not consistent with production volumes and the revenues from copper sales. Mopani has refuted the claims describing the report a flawed. The government has however asked the miner to pay back the money.
Labels: CUTS, MINING, SIMON NGOMA, TAXATION, WINDFALL TAX
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CUTS Int. observes weaknesses in news consumer bill
By Kabanda Chulu and Fridah Zinyama
Tue 21 Sep. 2010, 15:30 CAT
CUTS International has observed that the new competition and consumer protection bill has some weaknesses that should be addressed immediately in order to ensure full consumer protection.
Parliament has passed the new bill, which is awaiting Presidential assent. The bill has new features that will strengthen the business competition regime and enforcement of consumer protection mechanism. But Consumer Unity Trust Society (CUTS) Zambia programme officer Simon Ngona said the proposed legislation has revealed some inadequacies.
“The bill recognises consumer protection only within the context of unfair trading practices but the scope should be beyond this because a consumer protection law generally not only outlines the eight basic consumer rights, but also have provisions explaining how the law helps to ensure that such rights will be met and given that by its name, the bill purports to be a consumer law but it is not and it has to be comprehensive for it to be in the interest of consumers,” Ngona said.
“For instance, the definition of a consumer in the bill is limited but should be wide enough to include not only direct consumers but also other beneficiaries such as any other user other than the buyer, purchaser or partly promised person of a good or service is also considered as a consumer, secondly, the composition of the commission itself needs to be clear.
It provides that five members with relevant experience will be appointed by the Minister of Commerce and Trade but if there is no clear mention of criterion of selection, such posts are filled up on political basis and it will be good if space is created for representation of Civil Society Organisations and other non-state actors.”
He noted that part VII on consumer protection of the bill mentions penalties for violation of provisions related to consumer protection but lacked any mechanism for grievance redress.
“It should clearly outline how any consumer can file complaint, where this could be done (jurisdiction), the manner or procedure to file the complaint as well as procedure of disposal of complaints and the role of other stakeholder such as consumer organisation should also be highlighted in the whole redress process,” said Ngona.
“It is therefore imperative that these issues are taken into account if consumer protection is to be enhanced in Zambia and once such issues are addressed, the commission will have the muscle to protect consumers and legitimate businesses will have somewhere to turn to when they fall victim to these fraudulent practices and it is also important for consumers to be proactive and also to take time to understand some of the statutes that are being constituted and those that are being enforced.”
Labels: CONSUMERS, CUTS, SIMON NGOMA
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