By Angela Moonga
The Kitwe District Chamber of Commerce says the 47 percent mining tax regime that was intended in 2008 has not been achieved.
During the Budget Symposium in Kitwe over the weekend, KDCC observed that following a study by the government back in the days in 2008 the mining tax regime was intended to be raised to 47%from 32.1%.
“To date, we still see a challenge in finding a win-win balance between the mining sector and the government. This has resulted into a rather unstable mining Industry due to frequent amendments to the mining tax regime,” the Chamber observed. “In the previous ministerial statements, we have picked out comparable figures in the region as follows: Angola(52.5%), Mozambique(52.1%), Botswana(50.6%) Namibia(47.9%), Tanzania(45%), South Africa(42.9%) and effective tax rate
Chile at (42.6).”
They observed that recent calculations of the Effective Tax Rate from the Bank of Zambia on the Extractive industry Tax Rate showed Zambia’s at 26 percent.
“The effective tax rate of 26% suggest that some work is required in tightening up some aspects of the current tax ,regime among others in respect of: Reconciliation being necessary between actual capital expenditure and declared expenditure by the mining companies,” KDCC observed. “A distinction of losses arising from the capital expenditure and those of missed production targets being made and perhaps only losses from investment activities being allowed to enjoy the 10 years carry forward of losses provision.”
They proposed that the Mining Tax Unit within the Zambia Revenue Authority (ZRA) needed to be strengthened in order to improve compliance and at the same time curtail on tax avoidance.
The chamber indicated readiness to collaborate with ZRA to improve tax revenue collection.
