Date
A new report from Tax Justice Network Africa (TJNA) and Publish What You Pay Zambia titled "Taxing Zambia's Mining Sector for the Energy Transition: Opportunities and Challenges" highlights the urgent need for a more sustainable and equitable tax system in Zambia's mining industry.
Authored by TJNA’s Policy Officer, Mukupa Nsenduluka, along with Public Finance Consultant Mbewe Kalikeka and with contributions from Nsama Cikwanka, the report recommends critical reforms to the mining tax regime to allow for enhanced domestic revenue collection from the mining sector.
The report suggests several vital reforms, including revamping copper mining production, combatting VAT refund fraud, harmonizing income tax rates, and conducting a cost-benefit analysis for tax incentives.
According to the report, Zambia's mining industry is a critical contributor to the country's economy, providing substantial revenue and employment opportunities. However, the current tax system must be optimized to benefit the country's development goals. There are several challenges facing the tax system, such as the need for more transparency in the tax regime, tax avoidance and evasion by mining companies, and the inadequate collection of mining-related taxes.
Given the global shift towards renewable energy and the increasing demand for critical minerals such as copper, cobalt, lithium, nickel, and graphite, Zambia's mining tax regime requires careful consideration in its repositioning. This would align the country's goals of mineral exploitation for optimal tax revenue collection and ensure sustainable financing for the country's development.
The report presents a series of recommendations for improving the tax system and ensuring that mining companies pay their fair share of taxes. It advocates for adopting a more transparent and predictable tax regime that incentivizes companies to invest in the energy transition and supports the development of renewable energy infrastructure. It further recommends enhancing the capacity of tax authorities to monitor and enforce compliance with tax laws and improving collaboration between the government, civil society organizations, and mining companies.
In conclusion, the report's findings call upon stakeholders, policymakers, civil society, and mining companies to leverage the recommendations outlined so that Zambia can unlock numerous advantages, such as optimizing the gains from the energy transition, broadening the tax base to bolster domestic resource mobilization, and making significant strides toward achieving the nation's long-term development objectives.
To access the full report, please visit - https://bit.ly/42CeRnV
For more details on the report, please contact mnsenduluka@taxjusticeafrica.net
Photo Credit: UNDP South Sudan / Louis Fourmentin