Monday, October 17, 2011

Zambia to demand its mining dues

South Africa's Southern Times is reporting that the incoming Zambian government is planning to revamp its mining tax regime to clamp down on abusive mispricing, over-statement of costs and declarations of non-existent losses.

Incoming Mining Minister Wilbur Simusa is quoted saying:

'Accountability from the mining sector is very poor; accounting for the minerals is very poor. The tax collection mechanisms are inadequate. Mining houses are getting away without paying the due tax. Some inflate operational costs and we are taking measures to close these gaps.'

A key area of concern is the accuracy of copper production and export data. Zambia produced around 819,000 tonnes of copper in 2010 and is aiming to lift production to 1.6 million by 2016. The vast majority of these exports are routed via Swiss subsidiaries of the mining companies, and the incoming government is concerned that the non-availability of relevant Swiss customs data blocks attempts at reconciling Zambian copper exports to Swiss copper imports. TJN reads this as yet another example of Swiss secrecy.

This is a sad, but familiar story for followers of this blog: under the last government it was civil society that took the initiative to file a complaint to the OECD about mining companies violating OECD guidelines for multinational companies.

We wish the Zambian government well with their efforts to boost revenues. Read the Southern Times article here.


Anonymous Anonymous said...

Zambia should stop attempting to receive money for their copper via corporate taxation. Rather, they should demand (heavy) royalties for their copper. This is because the most concrete thing they can do is measure the tons of copper which leave their territory.

In this way, they would not have to care for transfer pricing or the like.

5:53 am  

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