CCZ demands that foreign companies should keep money in Zambian banks

THE Council of Churches in Zambia (CCZ) has been clear and unwavering in its demands that the government needs to take advantage of the high copper prices prevailing in the metal exchange market.
The Council has been engaging the government through the Ministry of Mines and the Ministry of Finance and National Planning about the need to develop a fool proof mechanism to monitor, supervise and collect the necessary revenues due to the government in the form of mining company activity tax, profit tax and VAT.
The Council is mindful that for that to happen, the government will depend on the mining company honestly declaring correctly the cash flows resulting from its mining business activities as captured in its receipts or sales records.
Secondly the proper collection of government revenues will also depend on the government ministries and ZRA being able to verify the mining company’s declaration of profits and losses.
Unfortunately the Zambian government through ZRA and the existing mining and financial policies is not able to verify the mining companies’ business transactions and declarations of loss or profit.
To make matters worse, the mining companies do not bank with our local banks. Their funds are kept abroad. We only see capital goods such as machinery and spare parts bought from this money coming into Zambia.
Secondly the Zambian copper has always been exported and sold in its raw form in markets abroad and the cash transactions happen in foreign banks. This lack of value addition to our copper means that the copper that we export is sold at low prices and the country loses on value addition. The exportation of unfinished copper implies that the country loses on its opportunity to create the much needed jobs. The country also loses a chance to develop backward and forward linkages between the mining sector and the manufacturing sector. This stops the country from ever industrializing its economy.
This therefore explains why the Zambian government is only able to collect more revenue through the pay as you earn (PAYE) taxed from the hard working Zambian workers as compared to revenue collected from the mining companies and other foreign companies operating within the country.
The Council therefore is glad that the audit of Mopani Copper Mines had just confirmed what CCZ has been telling our government ministers all along.
CCZ therefore reiterates its long held view and belief that the Zambian government now needs to listen to the voice of the overburdened tax payer and do what is right and economically sound. We demand the following:
  1. The policy on 100% repatriation of profits and dividends be re-visited to compel the mines and other foreign companies to keep their money and profits within the Zambian banking system. This will inject liquidity into the local economy and allow local banks have enough money to lend out to Zambian investors (SMEs) and allow these develop the local economy and create jobs.
  2. Government and ZRA will need to institute stringiest verification exercises in order to correctly record and monitor the business transactions of the mines and other foreign investors.
  3. Government and ZRA monitor the insider selling and trading happening between the mining companies and their foreign mother companies. This will stop these companies from undervaluing their business transactions.
  4. That Government introduces without delay the windfall taxes so that Zambians can at least benefit from the prevailing high copper prices.
  5. That the president set up an economic commission to find out how much Zambia is losing in uncollected revenues from the mines and other investors. We hope this commission will come up with a better way of policing the mines to the benefit of both the economy and the government.
Rev. Suzanne Membe Matale
General Secretary, CCZ.

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