ZIM asks govt., mining companies to adopt transparent VAT system

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The Zambia Institute of Marketing (ZIM) says government and mining companies should strive to achieve a more sustainable short term and long term view of a transparent tax system which promotes fairness to investors and government.

ZIM president Evans Muhanga says the institute believes that the debate on value added tax (VAT) refund to exporters can be settled once the two parties adopt a transparent tax system.

Mr. Muhanga says government can balance the issue of promoting foreign direct investment (FDI) in the mining industry and getting a reasonable tax to invest in various sectors.

He noted that government can invest in health, education and diversify into agriculture and tourism industries so that even if mining resources waste away in future, the future generation would find a strong diversified economy that is not heavily dependent on copper mining only.

“The tax regime on mining companies, we expect government to balance the issue of promoting Foreign Direct Investment in the mining Industry and getting a reasonable tax to invest in health, education and diversification into agriculture and tourism industries,” stated Muhanga.

Recently, the Zambia Congress of Trade Union (ZCTU) called on Finance Minister Alexander Chikwanda to take the matter involving VAT for mining companies to a full cabinet meeting so that the president and ministers can debate it and come up with a concrete decision on behalf of Zambians.

Mr. Chikwanda has in the recent past come under fire from some sections of society over the VAT general administration rule number 18 which requires government to refund the tax to exporters that include mining companies.