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Mining companies in Zambia have requested the Zambia Revenue Authority (ZRA) to consider conducting regular visits to mining sites in a bid to improve tax collection
According to the Zambia Chamber of Mines’ 2016 national budget submission to the finance ministry, regular visits by ZRA officials were recommended, as opposed to mining company representatives travelling to the revenue office in Lusaka. This posed privacy and security risks while documents are in transit, said the ZCM report.
The Zambian mining chamber has suggested that local tax offices conduct visits and inspection on-site, which could make tax administration easier. The ZCM also added that the government should allow self-assessment of value added tax (VAT) returns for the mining sector to ensure timely refunds.
“We wish to submit that Zambia Revenue Authority (ZRA) prevent the prevailing exchange rate loss or gain on VAT refunds by fixing an average US dollar and Kwacha rate for each month prospectively and retrospectively. It is of great concern that mining companies have suffered millions of dollars in foreign exchange losses,” said members of the chamber.
It has also called on the Zambian government to consider exempting import VAT on copper concentrates brought into Zambia for value addition, through smelting and refining.
Removing duty on exports of mineral concentrates will encourage the export of mineral concentrates that cannot be processed by local smelting facilities – a move that’s expected to result in increased government revenue, the ZCM added.
Additionally, the Zambian government should also ensure stability in policies to boost investor confidence, facilitating long-term planning for existing mine operators, it suggested.
“Since 2008, the government has made changes to the mining tax regime more than seven times. Too many tax changes over a short period of time have discouraged investment in Zambia.”
The chamber proposed a clear policy statement by the government about the pace of tax legislative changes, as this could create investor confidence, and eventually opportunities for Zambia.