STEVEN MVULA, Lusaka
THE Bankers Association of Zambia (BAZ) has told the Parliamentary Committee on Estimates that there is need for continued consensus between Government and mining companies on tax measures.
BAZ chairperson Clergy Simatyaba said consensus will help Government to effectively collect taxes from mining companies and will make the companies more transparent in their operations.
Mr Simatyaba, who was flanked by BAZ chief executive officer Leonard Mwanza, was giving the position of the association on the Income Tax Amendment Bill, which is being considered by the committee.
On the proposed amendments to the corporate income tax for mining operations, Mr Simatyaba said the proposed changes are equitable and within range when compared with other sectors of the economy as well as other countries with copper mining industries.
Mr Simatyaba said most countries,Â which include Peru, Australia and Congo, have a mix of taxes on profits and royalties, with royalties having low rates and corporate rates being higher, at 3 percent and 30 percent on average, respectively.
â€œElements of the Income Tax (amendment) Bill 2015 indicate a better move compared to the governmentâ€™s plan of relying entirely on royalties. The proposed amendment will also work as an incentive for increased investments and production in the mining sector and contribute to job creation and stability whilst at the same time potentially increasing government revenue,â€ he said.
Mr Simatyaba, however, expressed concern on the proposed two-tier tax regime.
â€œIn the absence of detailed rules on the type of mining operations to be taxed a variable tax of 15 percent, the proposed amendments could prolong and not resolve the current impasse between the Government and the mining industry,â€ he said.
On the proposed limit on allowable deduction losses to 50 percent of taxable profits for each charge year, BAZ feels that this is fair and will enable the government to at least get some tax revenue in a charge year in which a mining company reports profits.
And BAZ opposed suggestions from one of the members of the committee, Raymond Mpundu, that Government increases its shareholding in mines.
â€œThere is a lot of conspiracy by these mining conglomerates. Perhaps there is need to increase its shareholding in these mining companies,â€ Mr Mpundu said.
But BAZ executive member Mukwandi Chibesakunda said taking over ownership of mines would be a step backwards.
â€œThe partnership that exists at present present is working well. Government is getting its dividends,â€ Ms Chibesakunda said.
STEVEN MVULA, Lusaka