GOVERNMENT has assured that tax revenue from the mining sector is set to increase once measures to curb fraudulent activities in the sector are put in place.
Finance Minister Alexander Chikwanda said in Parliament on Thursday evening that the mining sector in Zambia contributed only five per cent to domestic revenue when in other countries in the region the contribution stood at 11 per cent.
He said when winding up debate on the 2014 Budget that the low contribution of the mining sector in Zambia was because of fraudulence that had been taking place in the sector.
"Government is dealing with this by placing a team of experts at Zambia Revenue Authority (ZRA) to design systems which will enable Government to determine both the quantity and content of the minerals mined in Zambia," Mr Chikwanda said.
He said the tax restructuring in the mining sector would be done in a way to optimise revenue from the industry without impairing mining operations.
"Minerals are a non-renewable resource and it is only fair that the country gets a fair and reasonable return from its non-replenishable resources, in the process safeguarding the interests of posterity," he said.
And Mr Chikwanda has maintained that the Government would not venture into capturing income generated in the informal sector as the cost of the exercise outweighed the revenue that could be collected.
"We have continued to receive recommendations to cast the tax net wider and be able to capture the income being generated in the informal sector. The informal sector is one of the sectors classified as "hard-to-tax" because of the nature of their transactions," he said.
On the suspension of Statutory Instrument (SI) 89 of 2013, which suspended duty on copper ore and concentrates for a period of one year, he said it was done to ensure that revenue from the mines was not unduly delayed as a result of the stockpiling that was currently going on.
Mr Chikwanda said since mining companies had been producing and stockpiling, the Government had not been able to receive revenues as projected.
He, however, said the revocation of SI 89 would not occasion any revenue losses but may only result in further delays of revenue flow to the treasury.
The delay in receiving mineral royalty on copper ores and concentrates was dependent on the time it would take mining companies to process and sell the copper.
On the increase in non-tax revenue targets, Mr Chikwanda announced that Government had put in place a new requirement for all statutory bodies collecting public funds to channel all their collections to the treasury.
He named the institutions that would be required to channel funds to the national treasury in 2014 as Zambia Information and Communication Technology Authority, Patents and Company Registration Agency, Zambia Bureau of Standards, Zambia Weights and Measures Agency, and Zambia Environmental Management Agency.