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Zambia’s mining sector gets relief from tax collection

By Nita Karume :

Zambia has managed to collect approximately 26% more tax in the first half of this year.  This is in comparison with the same period a year ago. The collection, according to the revenue authorities, has served to ease pressure on the financially-strained state.

Earlier on this year, the Zambian government delayed all planned borrowing indefinitely. That is, after its debt pile rose to US $9.3Bn at the end of March. This is an increase from US $8.7Bn at the end of last year.

Out of that, ZRA has since paid out US $432m in VAT refunds. This is inclusive of US $252m to the mining companies in the country. In a statement, the revenue authority went on to clarify that the refunds did not include a disputed US $413m related to a rule requiring mining companies to provide proof that metal exports had reached the declared destination.

According to media reports, Zambia has been withholding some money owed to mining companies in tax refunds. This is owing to lack of provision of the correct documentation. ZRA said that assessments totaling US $1.6Bn had been issued against some of the major claimants and taxpayers in the mining sector.

The Zambia Revenue Authority (ZRA) collected US $2.4Bn within the first half of the year. This, according to the authority is 6.4 above its target. The ZRA commissioner-general Kingsley Chanda has attributed the increase in percentage to value added tax revenue.

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