THE Zambia Revenue Authority (ZRA) will revise the revenue collection estimates for this year following the recent changes made to the 2015 mining tax regime, Commissioner General Berlin Msiska has said.
Government has revised the 2015 taxation regime for the mining sector which will see mineral royalty tax rate for open cast mining and underground mining operations pegged at nine per cent.
The corporate income tax on income earned from mining operations will be at 30 per cent while the corporate income tax on income earned from mining operations processing will be at 35 percent.
Further, the variable profit tax on income earned from mining operations will be limited to 50 percent of taxable profits.
Mr Msiska said ZRA would make adjustments to the estimates that were originally made for this year in view of changes to the 2015 mining tax regime.
He was speaking in an interview in Livingstone yesterday after he officially opened the world’s foremost authority on cross-border taxation, IBFD’s first Africa tax Symposium
The conference is discussing the trends in international taxation while focusing on an African perspective.
“Now that Government is going to Parliament to take the proposed changes for the mining regime, Parliament will approve the changes that they are proposing and then ZRA will have to revise the original estimates for the rest of the year.
“When Government makes changes the tax policy, tax administrators have to compute the revenue impact and make adjustments to the estimates that were originally made for that particular year,” he said.
Mr Msiska said ZRA had done fairly well in the first quarter in terms of revenue collection but there are challenges as the mining sector had not performed well in contributing their revenue to Government.
“Some of the reasons attributed to that low revenue from mining companies are that the expected production which we thought they would make has not come through as expected.
“Further, the Kwacha depreciation would have helped us but still the production numbers are quite low and some of the mining companies had to apply for deferment of mineral royalty and they applied for deferent. What we expected to come through in the first quarter did not come through because it was under deferment,” Mr Msiska said.
He said in a mineral rich country like Zambia, one would have expected mining industry to contribute more than four percent of the Gross Domestic Product (GDP).
Mr Msiska said there was more that tax administration could do to get more money into Government coffers.
He said there was need to come up with appropriate taxation and make some changes while ensuring that such changes did not discourage investments.
“When the civil society and the media discuss the low revenue that the Government is getting from the mining sector, they narrow it to the contribution which the mining industry has been contributing to Government coffers.
“I think more can be done to get more revenue from multinationals in general and that is the essence of this conference in Livingstone,” Mr Msiska said.
IBFD Knowledge Centre director Belema Obuoforibo said there was need to building capacity in revenue collectors to boost revenue collection.
“Education is key and therefore countries need to have well trained people to implement taxation laws.
“We need to have good and beefed up laws as some transactions are very complex and difficult to tax them,” Ms Obuoforibo said.