Commenting on the recent
decision by the Tanzanian Parliament to approve a US$27.4 billion five-year
development plan that backs the introduction of a super-profit tax on mining
companies, CUTS acting Centre Coordinator Simon Ngona said Zambia needed to
review the whole mining tax system to achieve optimum benefits from the
country’s mineral wealth.
He said it was important that the country
instituted key measures that would ensure revenue leakages were minimised or
He explained that re-introducing windfall tax without
addressing key challenges of taxation in the extractive industry would not be an
ultimate solution to ensuring Zambians benefitted from the country’s mineral
“It is not a single line of tax that ensures a country benefits
from its industries but the whole tax system and framework for that particular
industry,” he said.
Revenue Authority (ZRA) is on record admitting that it does not have the
capacity to properly tax the mines nor monitor their activities and recent mine
audits have reviewed glaring tax evasion and avoidance efforts by the mining
Last week mines minister Maxwell Mwale told Reuters that the
government would audit more mining companies after previous audits turned up as
much as US $200 million in unpaid taxes from the key economic
Mwale said the government was still owed by Mopani Copper Mines
in unpaid tax.
A recent audit on Mopani early this year revealed glaring
irregularities and inconsistency in production and revenue figures that the
mining company submits to ZRA for tax administration, most of which hinge on its
links to Glencore AG.
Revelations of the audit sanctioned by the
government with the aid of some cooperating partners also revealed the country’s
lack of capacity to verify records submitted by mining firms to ZRA for tax
It stated that the taxes being paid by mining firms in
the country were not consistent with production volumes and the revenues from
copper sales. Mopani has refuted the claims describing the report a
The government has however asked the miner to pay back the