Zambia lose millions of Kwacha in uncollected Mineral Royalty Tax




Over six million kilograms of minerals were exported from Zambia without export permits in the year 2015, according to the latest Auditor General’s report.
This entails that over 64% of the exported quantities had not been permitted to leave the Zambian boarders and had not been charged royalties in 2015.
Data from the report shows that during the year under review, minerals export permits were issued to seven mining companies for Three Point Four million kilograms of various minerals, but an amount exceeded by over six million Kilograms ended up leaving the country without authorization.
The document further reveals that during the same period, the ministry of mines did not attach officers to carry out inspections at the border post of Chirundu, Victoria falls Katima Mulilo and Kazuzungula. Another irregularity highlighted in the report is that twelve large scale mining companies did not submit export returns to the mineral economics department
Also contrary to financial regulation number 10, ten general receipt books were not presented for audit to the office of the Auditor General.
For a straggling economy like Zambia, such irregularities are a source of concern.
Speaking on these revelations the Publish What You Pay (PWYP) Zambia Coalition, a coalition of civil society organizations united for an open and accountable extractive sector expressed concern over the state of affairs in relation to Zambia’s failure to collect mineral royalty taxes amounting to ZMW 200,000,000.
“As a coalition we are in dismay by the inaction of the Government on the Auditor General report and the continued financial mismanagement by the various government departments.” Said Mtwalo Msoni, PWYP Assistant National Coordinator Zambia.
Royalty payments are ideally meant to be direct compensation for resource extraction as mineral resources are finite.
An economy heavily dependent on mining, showing such loss of revenue only leaves questions of how the country’s leadership remains committed to transform the lives of the majority poor.
Whilst these irregularities were happening in 2015, it was during the same year that the country recorded a huge budget deficit of over 20 billion Kwacha with then minister of finance Alexander Chikwanda putting the blame on reduced government revenues owing to low copper prices.
Zambia, Africa’s second producer of copper only stands to continue losing if such irregularities remain addressed.

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