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Alba Iulia
Wednesday, August 12, 2020

Government advised to extend its shareholding stake in Mines

Economy Government advised to extend its shareholding stake in Mines

Zambia still relies heavily on the mines
Zambia still relies heavily on the mines
GOVERNMENT has been advised to extend its shareholding in mother corporations of local mining companies to reduce tax avoidance and evasion that is rampant in the minerals’ sub sector.

Recently, Financial Intelligence Centre assistant director Clement Kapalu disclosed that Zambia is losing US$3 billion annually due to illicit financial flows mainly perpetrated in the minerals sub-sector.

The Centre for Trade Policy and Development, with support from the Open Society Initiative for Southern Africa (OSISA), last year commissioned a study to determine how Zambia can adopt a mineral revenue sharing mechanism model that can propel the country to the level of Chile or Botswana which are both enjoying an upper middle income status.

According to recommendations of the report Zambia has continued to rely on taxes as the main source of financial benefit from the extractive industry.

“There is need to broaden this development in the face of rampant tax avoidance and evasion. Government should consider holding equity not only in the local subsidiary of multinational mining companies but their mother corporations as well.”
“This will allow Government to gain not only on a tax basis but on a dividend basis as well,” it stated.

And presenting the findings of the report, consultant Jewette Masinja said there is need to strengthen the voice of host communities and increase their participation in the review of mining legislation and policy framework.

“There must be a legal process for direct consultation with people, not just informing them but their opinions should be taken on board,” he said.

Earlier, OSISA representative Edward Lange said there is need to harmonise regional legislation policies for the benefit of people.

6 COMMENTS

  1. There’s no connection between MRT and a middle income status for a mining country. Zambia attained lower middle income status in 2010 befre PF came in 2011. All those gains were lost even as PF increased MRT to 25% and now Zambia is the third hungriest country in the world. It is not how much you tax the mines and businesses but how you spend the national resources. Spending lavishly on chartered planes to dance #Dununa Reverse in New York ensures that you stay poor. It is now #DununaRegret.

    • BTW, PF in 2011 claimed in their mining policy that they would get minimum 30% in every mine. When the PF Mines Minister stated the same policy at the 2012 Mining Indaba in Cape Town, the Finance Minister, Alexander Chikanda, reacted furiously and within weeks the minister, Wylbur Simuusa, was dumped to Agriculture. PF was in a better place to implement this policy soon after winning in 2011 than now when the country is in tatters.

    • Mwapya, IMF on the PF’s throatsl! Don’t play with kaloba PF, you thought leadership is about garbish talk after a stolen election? Actions are important.
      The mines, Zesco & Zamtel are all gone, more job losses which will lead to repugnant of unemployment levels increasing drastically.
      PF of Edward Lungusha should hand over power to the rightful owners so that HH can stop this madness of PF’s economic quagmire caused by visionless & incompetent Changwa.
      This is dununa reverse in poverty style. IMF get them those corrupt PF bandits whilst load shedding is also taking it’s course.
      The Skeleton Key
      ~206~

    • @1.1 Buck Teeth.. I totally agree with you!PF was campaigning on a platform of increased benefits from the Mining Sector but when Simusaa in his spirit of patriotism wanted to exercise what they had preached in campaigns, a person who had never stood on a campaign podium prior to PF gaining office called Simusa and other advocating increased shareholding and taxation on the mining sector as “Lunatics!” Now this is where we are ! However,let us not close the chapter! What is important to agree as a nation on the way to go rather than competing to out do each other to please these foreigners who are only here to make money and leave us in poverty!

  2. You are very right Buck teeth Lungu.What we should be doing is maximizing the benefits from the mines and putting them to prudent use, not chartering luxurious planes to America. Even in some of these government ministries you find that there’s no fuel for local operations but when there’s a foreign trip for senior officials in the same ministry funds are always available. How do you honestly expect people to carry out government programmes where funding only comes TWICE in the whole year? Let’s be serious because this is surely a recipe for corruption.

  3. Zambia is still overspending and ignoring the falling economy whereas in other African countries, blind spend of funds is coming to an end. See what our neigbours in Tanzania did last year:
    Tanzania’s newly elected President John Magufuli has cancelled independence day celebrations, and has ordered a clean-up campaign instead. It would be “shameful” to spend huge sums of money on the celebrations when “our people are dying of cholera”, he said, state television reported. Cholera has killed about 60 people in Tanzania in the last three months. This will be the first time in 54 years Tanzania will not hold celebrations to mark independence from the UK.

Comments are closed.

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