Stricter Mining Rules May Boost Revenues in Zambia

June 18, 2012 Taxation in Zambia

BIG TruckLUSAKA – Copper mine operators in Zambia will soon face stricter reporting rules, following the government’s suspicion that some extractors are evading their tax obligations.

In a press conference held in Lusaka on June 16th the President of Zambia Michael Sata said that copper mining operators will soon need to provide the government with greater details of their extraction and refinement processes in order to help eliminate tax evasion and prevent-under reporting of incomes by mining enterprises.

According to the President, exporters of copper currently claim that a large portion of the metal extracted in Zambia is shipped to Switzerland, however, a recent investigation showed that the data held by Swiss customs authorities does not match up to this claim. The President suggested that the information provided by mine operators to the Zambian government was not completely accurate, and did not reflect the full extent of copper exports from the country.

In order to ensure that in the future mine operators do not attempt to skip out on their full tax obligations, the government will soon instate new reporting rules for all businesses engaged in copper mining. At the press conference the President explained that operators will soon be required to provide detailed information on the quantity of copper ore extracted, the type and grade of copper that was refined, and the total tonnage of the finished product. Reports will also have to be created and submitted annually, describing the efficiency and recovery percentages of all mining operations and metallurgical procedures. Information will also need to be provided on how much copper is sold and the average sale prices for the metal.

Explaining the need for the new rules, the President said that “…mineral production has been improving over the years but this improvement has not been matched with a corresponding increase in revenue to the government.”

Zambia is currently the seventh largest producer of copper in the world.

Photo by arbyreed