Business News-April 5

Tue, 25 Apr 2017 10:37:17 +0000

Govt urged to enhance mineral revenue sharing

By BUUMBA CHIMBULU

GOVERNMENT should amend the 2015 Mines and Minerals Act to allow for introduction of the Mineral Revenue Sharing Mechanism (MRSM) that will ensure local councils and communities benefit from revenue generated from nearby mines, Centre for Trade Policy and Development (CTPD) has suggested.

MRSM is a system of disbursing resources and other transfers paid by corporations to host governments.

CTPD economic governance programme assistant officer, Kangwa Muyunda, said the increase in mining production over the years had not translated into significant progress in terms of human development, particularly at the local level.

Ms Muyunda was speaking during her presentation on “Building effective community development through MRSM” at a meeting in Sinazongwe recently.

The meeting was attended by Senior Chief Mweemba, Sinazongwe District Council, councillors and community representatives.

“There is no specific law that provides for the Mineral Revenue Sharing Mechanism in the 2015 Mines and Mineral Development Act.  However, Section 4 provides general principles for mining and minerals development.

“These include the conservation and prudent use of mineral resources, the need for citizens in general, and those in communities where mining activities are being conducted in particular, to benefit from the resources, and the observation of safe, healthy and environmentally friendly mining practices,” she said.

Ms Muyunda, also Zambia Tax Platform coordinator, said the provision in the Act must stipulate the need to have a mechanism which allowed a percentage of mineral royalty tax shared to local councils through a local authority’s development fund.

“The fund be paid to finance local authority development projects; prioritizing local councils hosting the major contributors to the mineral royalty tax and centered around local community beneficiation, with clear proof of community consultations and participation in proposed development,” she said.

Ms Muyunda said the process of developing the MRSM should be transparent and participatory with Government taking the lead in the process while involving the civil society, companies and “legitimate” beneficiaries and councils.

She said it was imperative to disclose the receipts and utilization of mineral royalties by all extractive entities for the MRSM to have an impact on the communities and ensure that the natural resource translated to improved socio-economic livelihood of Zambia.

Ms Muyunda said communities hosting extractive industries in their constituencies should therefore be involved in the identification and prioritization of development projects for consideration, approval and inclusion in the development budget of the councils.

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Coalmine to buy council K500m machinery

By BUUMBA CHIMBULU

MAAMBA Collieries Limited (MCL) is in June this year expected to deliver equipment worth over K500 million to the Sinazongwe District Council for the development of the town.

Sinazongwe town council chairperson, Alick Muleya, said MCL would in the first week of June 2017 deliver the equipment – among them a 30-tonne tipper truck and a 7-tonne light garbage collection truck.

“We signed an agreement in February 2017 in which we agreed that within five months they will supply to the council. We agreed that by the first week of June, we will receive those equipment. At the moment, there are old ones which we rejected because we were given an alternative that we can either go for the old ones which they have or they buy us new ones,” he said.

He was speaking on the sidelines of the Centre for Policy Trade and Development (CTPD) meeting on Mineral Revenue Sharing Mechanism (MRSM) in Sinazongwe.

Mr Muleya said the mine and the council had also agreed that MCL should be exempted from paying land rates to ensure it delivered the agreed equipment to develop Sinazongwe.

“We agreed that we cannot collect rates from them because it is like we are disturbing their budget to purchase what we agreed; so we agreed that after we have received the machines, that is when we can consider charging them the rates,” he said.

Mr Muleya said MCL would in 2018 provide money instead of equipment as per agreement.

He also said the CTPD meeting on revenue sharing mechanism was important as it provided insights to the community and their entitlement to benefits from nearby mines.

“This meeting is very important because it is shedding light to the community so that they know exactly what is happening in the district and how resources are being managed and how they are reaching the council and how they are utilising the revenue.

“We have an estimated K16 million budget for 2017 as a council and in that budget we have a lot of activities we want to do. We are currently processing the papers for buying a grader which is expected to be in the district next month because the procurement system has already started,” he said.

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ZRA amnesty targets to raise K8 bn      

By BUUMBA CHIMBULU

AN AMNESTY on interest and penalties with an offer of 100 percent waiver on all tax accounts has been launched by the Zambia Revenue Authority (ZRA) and it is targeting to realise K8 billion through this exercise.

And the authority has announced that it is currently searching for over 400,000 cars under the motor vehicle amnesty launched last year.

All waivers however will be granted upon submission of outstanding returns and full payment of principal tax liabilities.

The exercise will run from 24th April 2017 to 31st July 2017.

ZRA commissioner general, Kingsley Chanda, told the media yesterday that the authority was aware of the penalties that were generated during the ZRA migration from the old system to the current tax online.

Mr Chanda explained that taxpayers were expected to submit all outstanding tax returns and pay all their principal tax liabilities for the tax periods prior to 1st March, 2017.

“During the amnesty period taxpayers can pay a lump sum or in instalments. Where the taxpayers are not able to settle the principle liability by 31st July, 2017, taxpayers should apply for a time to pay agreement to enable them settle the outstanding principle liabilities by 31st December 2017.

‘‘Interest and penalties will only be waived after the principle taxes are paid in full,” he said.

He however clarified that the amnesty would not apply to cases under litigation, those under investigation by the investigations department and on interest and penalties related to property transfer tax.

Mr Chanda others not qualified for the exercise were cases  whose interest and penalties related to customs duty, and interest and penalties arising from determined court cases.

Meanwhile, Mr Chanda said ZRA managed to recover K2 million from the motor vehicle amnesty with about K1 million assed once the over 40, 000 vehicles under search were caught.

“When we introduced the motor vehicle amnesty last year, people were not sure. Most of the taxpayers thought it was just a trap designed to impound their vehicles.

“But those that stepped forward had their vehicles properly cleared and re-registered,” he said.

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Food imports retard industrial growth – ZIPAR

By MAILESI BANDA

THE processed foods sold in Zambian supermarkets are imported from South Africa, and this is affecting the growth of industrialization in Zambia, says the Zambia Institute for Policy Analysis and Research (ZIPAR).

ZIPAR associate researcher Mwanda Phiri said this was evident from the dominance of imports of selected processed foods and household goods from South Africa.

She explained that South Africa continued to dominate the share of processed and household goods being sold in regional supermarkets and chain stores.  “At the international standard industrial classification four digit level, South Africa accounts for the highest share of Zambia’s import of manufactured bakery products, processed fruits and vegetables,’’ she said.

She said the product lines, while largely imported from South Africa, offered a great potential for increased industrial production in Zambia.

She said the country’s favorable climate and the arable land gave Zambia a comparative advantage in the production of agriculture commodities that served as inputs for processed foods.

She said the conditions suggested that there was potential for increased agro processing activities.

She explained that the country’s obsession for imports, while offering more choices to consumers, denied Zambia the opportunity for increased industrialization and the associated knock-on effects for employment creation and economic growth.

She said the domestic demand for processed foods offered unexploited opportunities to expand the production of various processed

products that could substitute for imported products and stimulate industrial growth.

She explained that the Zambian wholesale and retail sector had over the last 20 years witnessed phenomenal increase in the spread and the growth of the regional supermarket chain stores in Zambia.

She said the growth signaled increased domestic demand for consumer goods such as processed foods and household products found on the shelves of supermarket stores.

She said the development had not been equal to the growth in the share of local processed goods sold in the supermarkets and chain stores.

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New platform connects farmers to markets

BY SHEILA SAKUPWANYA

THE potential of the agriculture sector to diversify Zambia’s economy and boost economic growth has continued to be undermined because of lack of information to smallholder farmers, says Minister of Agriculture Dora Siliya.

And Ms Siliya has lauded Lima Links and Airtel Zambia for their efforts to connect smallholder farmers to their wider agricultural market place via market-led software platform.

Lima Links, in partnership with Airtel Zambia, has introduced a market-led software platform which would enable farmers interact with input suppliers, market agents and input and output agriculture service providers using a basic mobile hand set.

Speaking at the launch of Lima Links held at Intercontinental Hotel recently, Ms Siliya said the cheating of farmers by briefcase businessmen and agriculture commodity traders would soon be eliminated as farmers would have access to market information on time.

She observed that farmers had for a long time been cheated through buying of their crops at very low prices or unscrupulous businessmen who would collect farm produce and never pay farmers at all.

“Through Lima Links farmers will always have information at hand on the prevailing prices and the market that will be available for their produce,” she said.

Speaking at the same function. Airtel Money country director Christopher Chileshe said his company recognized agriculture as a leading sector in Zambia that was poised to lead the nation’s growth on an international scale.

Mr Chileshe said as farmers gained more access to transparent market prices and agricultural inputs, their transaction levels would increase.

“Currently the cost of a smallholder farmer reaching the market or travelling to pay for inputs is high, as distances are extremely long, eating up the farmer’s time and money.

He noted that Airtel Zambia in collaboration with Lima Links would seek an opportunity to provide farmers with a mobile payment solution through Airtel Money service.

“With Lima Links, Airtel sees an opportunity to provide a mobile payment solution, keeping farmers costs at less or equal to what farmers currently spend on physical costs incurred when travelling to make or retrieve payments,’’ he said.

He pledged Airtel Zambia’s commitment to drive access to mobile services among rural farmer communities by connecting them to markets and making markets more accessible.

Meanwhile, Lima Links markets linkage and operations manager Richard Yona called on Government to formulate a legal framework to guide market operations in the agricultural sector.

“There are a number of bottlenecks which needs Government’s intervention in the agriculture sector such as inadequate legal framework to guide market operations in Zambia and lack of cooling equipment in horticulture markets which leads to a lot of wastage,” he said.

And Lima Link marketing agent at Chisokone market in Kitwe Alex Talanti bemoaned lack of recognition of their farmer marketing agency business.

Mr Talanti called on Government to build conducive infrastructure which could store farmers’ produce safely.