By NATION REPORTER
ZAMBIA is losing an estimated US$829 million in tax every year to global tax abuse, ActionAid Zambia has revealed.
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ActionAid Zambia says according to the Tax Justice Network (TJN), Zambia is losing an estimated $829,536,823 in tax every year to global tax abuse.
ActionAid says it is extremely worrying that Zambia has been losing US$828 million in tax evasion particularly in times of austerity when the nation was in desperately need of resources.
AAZ interim country director, Jovina Nawenzake said the unearthed cases of tax evasion in the gemstone mining sub-sector by the Zambia Revenue Authority (ZRA) need urgent address.
Ms. Nawenzake said ZRA revealed that as of June 2023, less than 10 mines accounted for 80 percent of revenue collected from mining sector out of over 4,000 mining firms which highlights the extent of the problem at hand but also gives an indication of the mining sector’s revenue collection potential.
“ActionAid Zambia is concerned with the continuous tax abuse from the mining sector, particularly in times of austerity when the nation desperately needs resources. This has to be stopped if all stakeholders are to be patriotic.”
“ZRA revealed that as of June 2023, less than 10 mines accounted for 80 percent of revenue collected from mining sector out of over 4,000 mining firms. This highlights the extent of the problem at hand but also gives an indication of the mining sector’s revenue collection potential,” Ms Nawenzake said.
She said the export of un-refined mineral products has been a vehicle for non-declaration of economically recoverable elements such as gold, silver, and platinum.
Ms. Nawenzake misclassification and undervaluation of these products further exacerbates the poor revenue collection and facilitates illicit activities in the sector.
She said additionally, the large footprint of artisanal and small-scale mines coupled with the lack of a dedicated compliance team within ZRA leaves room for evasion and avoidance of taxes. This depriving is Zambia of her mineral wealth.
“We feel that the proposal to introduce a Minerals Regulation Commission is a positive and timely step to curb tax evasion. Continuous public sensitisation on tax compliance from the relevant authorities and the use of technologies such as TaxOnPhone, TaxOnApp, and electronic fiscal devices (EFDs) are still critical for increasing tax collection. There is need for the Government to reinforce its social contract with the taxpayers,” she said.
Ms. Nawenzake said ActionAid and the TaxEd Alliance will continue advocating for tax justice for sustainable, predictable, and equitable development and the recommend Prioritise curbing Illicit Financial Flows (IFF) and implementing progressive tax measures. Information sharing is cardinal to reduce trade mis-invoicing, transfer-pricing and other financial crimes.
She also said government needs to proactively promote local content, there is need to design policy that encourages value addition before export of mineral products.
Ms. Nawenzake said building capacity in laboratory mineral analysis would also enable customs officers to verify and valuate exports and reduce smuggling through by-products.
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