AN economic consultant has called for compromise from all stakeholders in coming up with a mineral taxation regime which will ensure a win- win situation for mining companies and the Zambian people.Mwilola Imakando said there is no standard mineral taxation regime in the world adding that each country needs to develop its own mineral fiscal regime taking into account its own peculiar circumstances.
Presenting a paper during a serminar on mining industry taxation in Africa held in Lusaka on Tuesday Dr Imakando said there was need to balance between the need for the mining sector to contribute more taxes and the need for reinvestment.
"Debate on mineral taxation is healthy and necessary. Debate must, however, be informed by facts and figures. Transparency in mineral production figures is critical. Likewise costs of production and declared profits must be supported by accurate information.
"Compromise is essential in agreeing as to what mineral taxation rates should be levied to ensure a win- win situation for mining companies and the Zambian people," he said.
Dr Imakando who is past Economic Association of Zambia (EAZ) president said that the government should enable Zambia Revenue Authority (ZRA) to have independent audits of production that will encourage mining companies to comply with tax obligations.
Mr Imakando said that there was need for the authority to have capacity to independently verify costs and revenues of mining companies in the country.
"ZRA's capacity to inspect and audit production must be built to allow for a smooth audit of production and revenues, this will result in increased revenue collections from the mining sector," Mr Imakando said.
He said it was important that the mining sector was properly managed considering that Zambia would remain a mining country for a long time.
He said the expenses in exploration, development and reclamation with regard to income tax should always receive special treatment.
Dr Imakando said Government had shown commitment to increasing tax revenues from mining by increasing mineral royalty rates and restrictions on the use of hedging.
He said that the only challenge that the country was faced with was that of information in the mining sector was hidden.
And University of Zambia Vice-Chancellor Stephen Simukanga said mining taxation had been a source of debate in various sections of society, but that there seems to be no common agreement on how best this could be done.
Professor Simukanga said that such debates were not only confined to Zambia but had relevance in many countries with mineral resources.