By KENNEDY MUPESENI –

GOVERNMENT should ensure prudent financial management of public resources to cushion the fiscal deficit due to the revised tax regime, a local research institute has said.
Policy Monitoring and Research Centre (PMRC) executive director Bernadette Deka said to achieve this, Government must prioritise already budgeted for activities and tighten expenditure to offset the short-term loss in revenue.
She said there was need to strengthen tax enforcement mechanisms to maximise revenue collection of the reintroduced Corporate and Income Tax (CIT) on mining operations.
This was especially important in resolving conflicts and inconsistencies in the reporting of CIT on mining operations which in the recent past had affected revenue collection.
Recently, Government announced proposed changes to the mining tax regime.
This proposed change was from the two-tier system; which entailed the collection of both CIT on operations and mineral royalties, to a one-tier system with greater emphasis on mineral royalties.
The changes were aimed at simplifying the mining tax regime and avoid conflict in the interpretation of tax legislation, which had characterised the sector.
Accounting for the differences in operating costs between underground mining and open-pit thus taxing each differently under the new tax system would increase the level of tax revenue with expected excess revenue of K 1.7 billion as a result of the new tax changes.