The Zambia Revenue Authority (ZRA) is under fire following revelations in the latest Auditor General’s report, which highlighted a significant gap in tax compliance related to mineral exports. ZRA issued 44 tax clearance certificates to 259 individuals and companies, allowing them to obtain export permits for minerals worth over K14 billion. However, a review of these records revealed that the recipients of these permits failed to file mineral royalty tax returns, with many declaring nil returns while exporting minerals valued at a staggering K14,219,382,322.
The findings have raised serious concerns about the effectiveness of the ZRA in ensuring that exporters comply with the country’s mining tax laws. Section 47(3) of the Mines and Minerals Development Act stipulates that in order to obtain a mineral export permit, applicants must submit, among other things, a mineral analysis and proof of compliance with tax obligations. However, the Auditor General’s report revealed that the ZRA issued permits to companies and individuals despite their failure to meet these requirements.
The ZRA struggled to provide satisfactory explanations before the Public Accounts Committee (PAC) as to how export permits were granted in the absence of proper tax filings. The issue has sparked renewed calls for stricter enforcement of tax laws within the mining sector, particularly given the substantial revenue lost due to unpaid mineral royalties.
This incident underscores the ongoing challenges faced by the ZRA in its efforts to ensure that Zambia’s mining sector contributes adequately to the national treasury. With mineral royalties being a critical source of government revenue, the failure to collect taxes on K14 billion worth of exports raises questions about the broader effectiveness of the tax administration system.
As the investigation continues, questions remain about the transparency of the ZRA’s operations and the mechanisms in place to monitor tax compliance in the mineral export sector. This situation highlights the need for improved oversight and accountability to ensure that Zambia’s mineral resources are fully contributing to the country’s economic growth and development.
