Some councils in Zambia have confirmed failure to collect levies from big mining companies
Despite copper prices and other minerals mined enjoying excellent international prices and Zambia having over eight (8) large scale copper mines, local authorities mostly known as councils have reported having serious challenges collecting land rates and other levies from mining companies.
Most council officials and contacts spoken to by the Zambian Business Times – ZBT have indicated that compliance levels from mining companies are too low, and when the councils push for collections, there is heavy political interference from senior government officials and politicians which make it impossible to collect the dues.
Speaking in an exclusive interview with ZBT, Mwinilunga Town Council Chairperson Jonathan Chinyemba confirmed that for instance, a gold mine in his district has not been paying the rates since the time it was opened.
The Council chairperson said local authority which is constitutionally mandated to raise revenue from which ever mine that might exist within its jurisdiction has not been getting anything from the mine. He said from the time the gold mine started up to the time it was closed the local authority did not get any tangible benefit from the gold mine and that was the more reason that led to the closure.
He explained that the local authority in mining towns and cities are entitled by law to get revenue which can be turned into service delivery to the residents of that town or city which has not been the case in Mwinilunga and many other mining districts.
Most districts in Zambia’s Copperbelt and North Western Province have large scale mines but a check on the local authorities state of finances and operations shows that there is little to no compliance by these large mining companies in paying local levies. In functional economies, projects such as community roads are undertaken by the council from levies collected.
When one looks at council offices and finances in areas such as Masaiti and Lufwanyama districts of the Copperbelt which are rich in limestone and emerald and house large cement and emerald companies, one can tell the low levels of compliance to payment of council levies and land rates.
As a result of this, it has become very difficult for the councils to collect even straight forward levies such as market levies or trading license levies from locals as the big companies that post big revenue and profits numbers are themselves not compliant.
With the exception of Solwezi and Kalumbila district councils which have seen some decent office buildings being put up, most councils across the country are a sorry site and have been incapacitated by political interference that is preventing them from collecting levies.
The Zambia Revenue Authority – ZRA recently announced that they are setting up a unit for small scale and artisanal miners tax collection unit, but analysts say this may not be successful as long as the tax collection levels from large scale mines remain either low or shrouded in secrecy under the guise of tax payer confidentiality.
Source: ZBT
