MINING has not been one of the most audited subjects by the Auditor General’s office and concern has continued to prevail on the mining sector’s obligations to pay their taxes to Government.
Auditing of mining firms to ensure its owners pay their taxes is a matter that causes ripples of discomfort in this country but for an industry such as mining, the prudent way to conduct business is the need to pay their dues.
The Government on behalf of the people needs to derive the needed revenue so that the ordinary citizens benefit from what nature has offered these lands by growing the economy and ensuring that no one is deprived in the provision of various amenities.
This issue has been long-standing. The Ministry of Mines has stated that Government had insufficient capacity for monitoring the mining industry in the country and as a result, it had no reliable production statistics database, making it difficult to verify production costs and sales data declared by the mines as a basis for royalty and tax computations.
This has been a matter that requires urgent addressing so that whatever declarations issued by the mines tally with what is transpiring in the mines.
The need for improved data collection is key in guaranteeing transparency and accountability of activities in the mines.
Not long ago, Konkola Copper Mines was caught in the limelight as regards its tax obligations with the Government, without delving much into details this matter has generated interest as to how transparent this sector is in terms of payment of taxes.
The interest generated regarding the management of the mining sector does attract doubt, because it is general knowledge that this sector is very important to drive economic growth.
The mining sector is likely to contribute to the development of the economy of any country through taxes from large-scale mining companies, and contribute to social–economic infrastructural development within the area where the mine is located.
The sector can create employment opportunities both directly in the mines and indirectly on services to the mines, provide education and health services, increase foreign exchange reserves (reducing a country’s foreign exchange deficit), improve infrastructure like roads and water supply, and create other economic activities to support the mines.
In developing countries, such as Zambia mining is a key sector and has continued to grow.
Thus when audits are conducted the outcomes will result in improved institutional and stakeholder capacity in the mining sector in the country.
For this and several other reasons, the Auditor General Anna Chifungula admits that there is a challenge in auditing mining companies but that her office is working closely with the Extractive Industries Transparency Initiative to train officers to be competent and up to the task of auditing the country’s mines.
Despite audits being conducted mostly by international auditing firms, it is very important that a Government institution such as the Auditor General’s office is equally playing its role and expand operations and effectively audit the mines.
This will help keep a vigilant eye on transactions in the mining sector, which are currently raising eyebrows among concerned parties including Government.
This move is spot-on and the onus is on the Auditor General’s office to ensure the whole exercise comes to fruition and is able to yield the desired results, so that the anxiety surrounding audit queries regarding the mining industry is brought to rest.
For a long time, there has been a perceived secrecy in the manner the mines have been conducting business in the country and it is high time that this picture is changed for the better as every Zambian has the right to know the status of mining operations without disadvantaging the owners in this area of investment.