By SYLVESTER MWALE –
ECONOMIC development consultant Robert Liebenthal has called for truthful information from the mining firms about their production to convince the Zambian people that they are not cheating on taxation.
“There must be total confidence in the information available from the mines on production, sales, costs and profits,” said Mr Liebenthal in response to a Press query on the directive by President Edgar Lungu to review the 2015 mining tax. “Only then will Zambians start to believe that the mines are not cheating.”
Mr Liebethal also called on the ZCCM-IH to be more assertive and demand more information and dividends from mining companies, which would then accrue to the Government.
Mr Liebenthal welcomed the directive by President Lungu to amend the 2015 mineral royalty tax system saying the new system would have instigated closures and job losses.
President Lungu recently directed the ministers of Finance and Mines to amend the 2015 mineral royalty tax system and make fresh recommendations on the policy to Cabinet.
Of the options set out in the President’s directive is the need to negotiate interim fiscal arrangements for operations that are most affected on a case-by-case basis.
But Mr Liebenthal said that adopting such an alternative would be a step backwards because it was open to arbitrary and non-transparent deals reminiscent of the defunct Development Agreements.
He said there was need to strengthen the Zambia Revenue Authority (ZRA), the Ministry of Mines, Energy and Water Development and ZCCM-IH to enforce effective mining taxation.
The economic consultant acknowledged that it was unlikely that the country would raise K5.9 million from the mines which was projected in the 2015 National Budget.
He said the present impasse was a result of deep distrust between the Government and many local stakeholders and the mines. He called for better dialogue to address the distrust.
Finance Minister Alexander Chikwanda hiked the mineral royalty tax in the 2015 National Budget from six per cent to eight per cent for underground mines and from eight per cent to 20 per cent for open cast mining operations.
But the decision caused widespread outcry from the mining sector with some companies indicating their intentions to close and lay off employees in response to the new tax regime. This forced the Head of State to intervene.