Sam 1 Oct 2011 19:58
Chaud devant
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Saturday, 01 Oct 2011
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Zambia, Africa’s largest copper producer, realized a paltry USD 235 million in tax arrears this year accrued from mining activities by foreign companies in the country a move that government contends is not enough to meet the national development demands.
According to data at Zambia Revenue Authority, the arrears have accumulated since 2008 after foreign mining companies disputed government’s decision to revise upwards the taxes against long term development agreements whose scrapping subsequently was accepted in 2009.
According to sources within the revenue agency, tasked to collect tax from mining companies, the private and public sector, the government has generated USD 235 million in taxes and that the government had reached an agreement with mining companies on accrued taxes which they have since paid the government to date.
A senior tax collection official at Zambia Revenue Authority said that we have convinced the mining companies to harmonize these arrears and so far we have approximately ZMK 1.5 trillion in our couffers. However, some mining companies have disputed accruing any arrears and that the government, through the revenue agency seeks to pursue the matter and ensure the matter was amicably resolved, so as the money could be ploughed into infrastructure development projects.
According to estimates, Zambia’s revenue would be expected to swell to ZMK 16 trillion collected so far this financial year from the ZMK 11.4 trillion generated a year earlier.
Vedanta Resources, owners of Konkola Copper Mines, Glencore and First Quantum Minerals, owners of Mopani Copper Mines as well as Kansanshi Copper Mines, China Non Ferrous Metals Corporation, owners of Chambishi and Luanshya Mines, Barrick Gold, owners of Lumwana Copper Mines and Metorex, owners of Chibuluma mines operate in Zambia.
However, the government is not satisfied with the revenue being generated from the mines so far and seeks to dialogue with its partners in the industry to recoup what was being lost in uncollected earnings from mining activities being undertaken in the industry.
Mr Wilbur Simuusa new mines minister of Zambia said that the government despite the abundant mineral wealth endowed in the country was not generating enough returns from the industry and there was need to renegotiate a number of agreements. The tax returns were inadequate to meet the needs of Zambians especially in the social sector and there was need for a review to ensure both the mine owners and the government realized their intended benefits.
Mr Simuusa said that the whole set taxation needs to be revisited urgently because we believe that we are not generating enough from the mines. One would not imagine that the entire mining sector is generating a paltry 2% from the mining sector of the Gross Domestic Product.
Zambia’s mining sector production levels has improved over the years with the experts predicting that the southern African nation, could with adequate policies raise its outturn to more than 1 million tonnes by 2012 and further to 5 million tonnes by 2015 with the opening of several projects in the sector spurred by various explorations in various parts of the country.
Recently, Mr Bob Sichinga economic consultant among other players contended that there was need for Zambia to revive the windfall tax to realize real returns and make the country self sustaining and develop infrastructure.
According to the projects of government in 2008, Zambia would if the windfall tax was retained, would have been earning an average USD 500 million per annum from copper mining. However, Mr Rupiah Banda government in 2009 reneged on its plans and waived the tax arguing that it would “suffocate the ‘blossoming’ industry.
Recently, former president Mr Banda stated that mining audits had revealed that mining companies owed up to USD 200 million to the government in unpaid taxes.
(Filed by Mr Kapembwa Sinkamba SteelGuru Correspondent Zambia)
