Government Moves in to Curb Loss of Revenue Earned Through Mineral Royalty Tax Payment

Davies

The Ministry of Mines and Minerals Development has announced that with effect from 1st July, 2020, the Ministry will no longer accept samples submitted by exporters to the Chemistry Laboratory at the Geological Survey Department in Lusaka to facilitate the issuance of export permits.

Currently, every client who wishes to apply for a mineral export permit submits a sample of the export consignment to the chemistry laboratory of the Ministry.

Ministry Permanent Secretary Barnaby Mulenga says based on the sample analysis results from the laboratory, a Mineral Valuation Certificate of the entire mineral export consignment is prepared.

Mr. Mulenga says it is on the strength of this valuation certificate that, after the applicant has obtained a mineral royalty clearance certificate from the Zambia Revenue Authority, the Ministry issues a mineral export permit to the applicant.

He said unfortunately, this practice has opened a window of opportunity for some mineral exporters to deliberately submit low-grade samples to the chemistry laboratory.

Mr Mulenga said this has resulted in the undervaluing of mineral exports and consequently, loss of revenue earned by the government through mineral royalty tax payment.

He said the loss of revenue could amount to hundreds of thousands or even millions of dollars per export, depending on the amount of discrepancy in mineral grade between the submitted sample and the consignment being exported.

“In view of the above, the Ministry wishes to put an end to the current arrangement so that Officers from the Ministry will be going to the mine sites and traders’ warehouses to collect the required samples instead of relying on samples submitted by exporters”, he said.

Mr Mulenga has explained that this decision was arrived in order to earn the government a lot of revenue which is currently being lost through some exporters’ submission of low grade samples to the ministry’s chemistry laboratory.

He said was also done to eliminate the inconvenience of requiring clients to travel to Lusaka to submit samples each time they apply for a mineral export permit and to achieve orderliness in the processing of mineral export permit applications as opposed to the randomness currently prevailing.

Mr Mulenga added that the move is meant to verify the location of the mineral samples and their Mine origin.

He said it is the desire of the government that the ministry gains full oversight of the mineral supply and value chain in order to ensure effective monitoring of mineral production and exports.

Mr Mulenga said in order to facilitate the smooth transition from the current scenario to the new one, all exporters are requested to ensure that their applications for export permits are received by the Ministry at least one week before the officers’ sampling visit to each region.

He said the applications should state clearly where the export consignments to be sampled will be located, with the applicants’ physical address and other contact details.

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