GOVERNMENT has assured that tax revenue from the mining sector is set to increase once measures to curb fraudulent activities in the sector are put in place.
Finance minister Alexander Chikwanda said in parliament on Thursday
evening that the mining sector in Zambia contributed only five percent to domestic revenue when in other countries in the region the contribution stood at 11 percent.
He said when winding up debate on the 2014 budget that the low contribution of the mining sector in Zambia was because of pervasive fraudulence that had been taking place in the sector.
“Government is dealing with this by placing a team of experts at Zambia Revenue Authority (ZRA) to design systems which will enable government to determine both the quantity and content of the minerals mined in Zambia,” Mr Chikwanda said.
He said the tax restructuring in the mining sector would be done in a way to optimise revenue from the sector without impairing mining operations.
“Minerals are a non-renewable resource and it is only fair that the country gets a fair and reasonable return from its non-replenishable resources, in the process safeguarding the interests of posterity, “he said.
And Mr Chikwanda has maintained that Government would not venture into capturing income generated in the informal sector as the cost for the exercise outweighed the revenue that could be collected.
“We have continued to receive recommendations to cast the tax net wider and be able to capture the income being generated in the informal sector, the informal sector is one of the sectors classified as “hard-to-tax” because of the nature of their transactions,” he said
On the suspension of Statutory Instrument (SI) 89 of 2013, which suspended duty on copper ore and concentrates, for a period of one year, he said it was done to ensure that revenue from the mines was not unduly delayed as a result of the stockpiling that was currently going on.
He said since mining companies had been producing and stockpiling, the government had not been able to receive revenues as projected.
He however, said that the revocation of SI 89 would not occasion any revenue losses but may only result in further delays of revenue flow to the treasury.
The delay in receiving mineral royalty on copper ores and concentrates was dependent on the time it would take mining companies to process and sell the copper.
On the increase in non-tax revenue targets, Mr Chikwanda announced that Government had put in place a new requirement for all statutory bodies collecting public funds to channel all their collections to the treasury.
He named the institutions that would be required to channel funds to the national treasury in 2014 as Zambia Information Communication Technology Authority (ZICTA), Patents and Company Registration Agency (PACRA), Zambia Bureau of Standards (ZABS), Zambia Weights and Measures Agency; and Zambia Environmental Management Agency (ZEMA).
This is what I’m talking about. 5% revenue is ridiculously meagre considering the tonnes of copper the country exports. Where does the rest go?
Mr. Finance minister please be stubborn on this issue and don’t rest until the fraudulency is curbed. We have been exploited for too long.
This is what i wanted to hear(something in this line) even though i`m not very convinced.I still feel the tax the mining companies are paying is too low.
Help! The dogs or Zambian Watchdog as they call themselves reported that Finance Minister had resigned. How come is still making news?
Zambia watchdog are false whistle blowers.
saulosi nokoh teepol mu nyozi.viva watchdog!!!wu wu wu
@ one Tonga.
ZWD did not report that he had resigned but was in a ‘resignation bid’ which of course was turned down. Can’t you see that the man is still suffering from the denunciation? He has just stayed on for the sake of the nation.
Mr Chikwanda, you seem to be self defeating on the issues you have talked about: revenue from informal sector, export of concentrates and 5% from mines. You seem to be too late, confused and lacking the rightful solutions to the problems highlighted. How can you fail to capture revenue from informal sector – your reasoning on cost vs income is very weak; On concentrate exports, you should have resigned on moral ground; on 5% compared to 11%, this issue could have been done a long time if you are focused because its a long standing issue which each successful govt fight with kids gloves. Over all you have shown very poor rating of your judgement and ability on these issues. You can do better than that. Don’t you focus on getting loans when we have means possible to raise revenue locally.
What a stu.pid OLD Man! This is the same fo.ol that had designed and signed an SI 89 to allow copper exports tax free for 1 year and was given $4m bribe!!
We know that various schemes of Tax fraud at ZRA under PF have in fact been always been officially sanctioned by YOU Chikwanda.
The problem has even spread to other sectors – Zambia Sugar, Lafarge, Pamalt, etc all dont pay taxes. But this old foo.l has specialised in borrowing and signing loans! Every week this ka old nkalamba is signing loans of one type or another instead planning on effective local tax policies!
You surely can call an old man stupid?
I suggest the Minister takes a rest. He is still shocked and frustrated by the revocation of SI 89. He seems to have a vision on how to raise extra revenue to finance the mammoth 2014 budget but the problem is that the pro poor pf policies can’t allow this. He can’t dare to tax the informal sector ‘vendors’, the people that put pf into power. IT IS A NO WIN SITUATION.
How sincere is this minister that he is just now waking-up to this reality? The mines already put more money in your pockets sir, that’s why they are not contributing their fair share to the national treasury. The problem has not been the mines but PF who came in with too many big empty pockets that needed to be filled with money. Otherwise, how do you explain the gaping disparity between 5% and 11% when mining is not a new industry in Zambia?
why do u people waste time on politics ? what a lost nation.