ActionAid Zambia has commended Finance Minister Alexander Chikwanda for increasing the mineral royalty tax in the 2015 National budget.
Speaking to Qfm in an interview, ActionAid Zambia Economic Justice project officer Patrick Nshindano said the increase in mineral royalty will compensate for the corporate income tax which many companies have not been paying.
Ms. Nshindano said that the Zambia Revenue Authority (ZRA) has demonstrated their inability to collect corporate income tax from the mining sector as only two companies were paying corporate income tax which implies that many companies were not paying.
He added that increasing the mineral royalty tax to 8% and 20% for underground and open cast mining operations will enable the country have more revenue which will in turn contribute to economic development.
Mr. Nshindano noted that the challenge at play currently is the lack of capacity by the country to handle aggressive tax planning by most multinational and mining companies and that the mineral royalty will take care of that.
Mr Nshindano advised mining companies to embrace the new tax regime and comply.
He further urged the Zambia Revenue Authority and the government to ensure that the necessary measures are put in place to deal with mining companies that will fail to comply with the new mining tax regime.
The pathetic fighters incompetent finance minister of all time. Chikwanda failed in the 70s and led the country’s arteriosclerosis with pathogens of recession and he has as currently still lingering in failure. Dinosaur from without, borrowing all time and no production.
PF has failed.
I think he has made the right choice and this royalty tax was long overdue
But the need for Corporate Income tax should be swept away, saying that It would be helpful to know how this money is spent, Revenue Collection is good but what is the money spent on?
Thanks
Thanks
There is nothing to be excited about. the tax increase will only affect mine that deal in none industrial metals. this means that it will only affect small scale miners of emeralds and similar metals while KCM,MOPANI, LUMWANA and KANSANSHI will be left to enjoy their profits.
What are you talking about. Better keep quite if you don’t know anything
Also ensure that the tax base is broadened to include the informal sector. People in formal employment have shouldered that burden for too long.
” Also ensure that the tax base is broadened to include the informal sector. People in formal employment have shouldered that burden for too long. ”
I completely disagree. Poor people are not the enemy. The massive expatriation of profits from the mining industry is the problem.
Did you know that Glencore is headquartered in Switzerland? How blatant can they be?
Its rare in poor countries like ours that the rich and mighty are taxed. They always find a way of avoiding tax. They bribe or blackmail govt so that favourable tax systems are drawn up fo them. What I have seen so far is that rich companies are the stingest. They often find tax compliance an affront to their success eg the post. What the minister has proposed shud be suported.
The proposed increase is a double edged sword. If levied on gross sales, Roytalty tax would be guaranteed revenue for the fiscus in view of inadequate legislation and possibly skills to deal effectively with rampant evasion and avoidance by multinational national mining companies operating in Zambia. On the flip side, such a massive increase in the Royalty rate will invariably substantially increase the effective tax rate which in all likelihood will discourage foreign direct investment which Zambia desperately needs.
ABC probably knows the ramifications of this move but I doubt whether other pf minions do so as to foster robust debate in this regard. We shall wait and see!
@Cjay
Sorry, but you are a bit mouthy. You are negative and insulting. I fail to understand this type of Analysis. Be objective and try not to be so verbose. Your posting is just annoying. Tax imposed is good and yes we will deal with rampant tax avoidance. Tax imposed will potentially discourage more ‘piranha fish’ investors entering the pond, but hey……that’s also good. We want honest and socially responsible investor or they can just GO. ZRA must buck up and go ape shit collecting tax everywhere because we need this dough. We’re in economic crashing debt.
Be positive. It’s a good thing Chikwanda has done, although in my opinion it should have been set at 50%, that wat I wouldn’t even have to care about rampant tax evading!!
@Patriot what, what
I forgive you and will go easy on you cuz you know jack about tax and simple economics. I will not dignify your attack on my persona with a response cuz people may not notice the difference. I haven’t insulted you or anyone so i take it you are halucinating when you accuse me of that. I will school you though:
The so-called ‘Royalty tax’ is not tax per se. Its a royalty paid to the state for consumption of a state’ s mineral resources. In other words you pay a royalty whether you have taxable income or not, hence my reference to gross sales. Having said that, do you think a company can survive if it paid a Royalty at 50% on gross sales? You must be dumb. Tax evasion is a crime. Clearly you don’t care about crime. ZRA would beg to differ with you.
Cont’d
@ Patriotic what, what
Cont’d
About investment. In making investment a company will invariably consider ‘actual’ as well as opportunity costs, tax being one of them. If Zambia has a higher effective tax rate than a competing investment destination, an invetsor may opt for the competitor and Zambia will lose out. Funny that after I made my post ZWD posted an article on FQM stating similar sentiments. FYI fact is investors’ top priority is the bottom line. All the social responsibility sh!t is secondary. And Zambia needs the investment either way.
I have tried to put it in the simplest of terms but if you still don’t understand, suck it. But Please don’t comment on subjects you are clueless on. It just exposes the Jackass in you. Don’t mention it.. You welcome!
Mwe bantu, this copper that that we have is the same copper that countries like Chile have utilised to reach the levels where they are now (which is far higher than us) in spite of having being under brutal military dictatorship for any years. What is wrong with us kanshi, is it just a question of the tax regime on the mines or there is more to it?
@Thrash
I feel your pain bra. Almost certain its just attributable to mismanagement of public funds by politicians. Taxes are collected but the lack of political will to develop the country is the main draw back. Politics of poverty. Bottom line. The Zambian Government is heavily indebted. The bulk of this debt goes to fund consumption in instead of infrastructural development. I don’t expect any real change in political behaviour for the foreseable future. As a nation we are doomed because the voting masses are illiterates. WK said it. Hard to swallow but its the truth!
I support chikwanda on this one.This is what he should have done at first before going for kaloba loans.I only hope the money raised will be put in good use,not paying medical fees for old charles katongo Mwango.
Guys this is our country, we need to be more positive and supportive. This was a mildly good move. More could have been drawn in to really deal with the mines in a tougher way. They need to be paying tax into our economy or leave. Period.
ZRA must buck up and go ape shit collecting tax everywhere because we need this dough. Tax imposed is good and yes we will deal with rampant tax avoidance. Tax imposed will potentially discourage more ‘piranha fish’ investors entering the pond, but hey……that’s also good. We want honest and socially responsible investors or they can just GO.
Oh that’s good comment Action Aid, some fresh air from ifisushi fya ba Post.
lets milk as much as possible. its better our own corrupt leaders (not to say all are corrupt) relish on the collected tax from mines than the monies being shipped to foreign countries …
Action Aid is forgetting that most these mines have secretly signed longterm developmental agreements with the government to keep the tax as it is!!
8% ? In Australia its 35 % .