ActionAid Zambia has expressed concern with the continuous tax abuse from the mining sector, particularly in times of austerity when the nation desperately needed resources.
The Zambia Revenue Authority (ZRA) revealed that as at June 2023, less than 10 mines accounted for 80 percent of revenue collected from mining sector out of over 4,000 mining firms.
According to the Tax Justice Network (TJN), Zambia lost an estimated US$829,536,823 in tax every year to global tax abuse.
ActionAid Zambia Interim Country Director, Jovina Nawenzako, said the unearthed cases of tax evasion in the gemstone mining sub-sector, needed urgent address because the treasury was losing a lot of revenue.
“This has to be stopped if all stakeholders are to be patriotic.This highlights the extent of the problem at hand but also gives an indication of the mining sector’s revenue collection potential,” Nawenzako insisted.
She said the ZRA Mineral Value Chain Monitoring Project (MVCMP) spotlighted additional challenges that needed immediate action.
Nawenzako noted that the export of un-refined mineral products had been a vehicle for non-declaration of economically recoverable elements such as gold, silver, and platinum.
“Misclassification and undervaluation of these products further exacerbates the poor revenue collection and facilitates illicit activities in the sector,” she stated.
Nawenzako said the large footprint of artisanal and small-scale mines coupled with the lack of a dedicated compliance team within ZRA left room for evasion of taxes.
“This is depriving Zambia of her mineral wealth. We feel that the proposal to introduce a Minerals Regulation Commission is a positive and timely step to curb tax evasion,” she stated.
Nawenzako added that the continuous public sensitisation on tax compliance from the relevant authorities and the use of technologies such as TaxOnPhone, TaxOnApp, and electronic fiscal devices (EFDs) are still critical for increasing tax collection.
She observed the need for the government to reinforce its social contract with the taxpayers.
“Despite efforts to improve tax collection, challenges persist and ultimately disadvantage Zambians who are subject to poor service delivery, Nawenzako noted.
She recommended that government should prioritise curbing Illicit Financial Flows (IFF) and implementing progressive tax measures.
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