‘LET’S MARKET MINERALS LOCALLY TO ENJOY HIGH COPPER PRICES’
By BUUMBA CHIMBULU WITH copper prices at their highest, Government has been urged to urgently localise the marketing of all minerals and link exports earnings to local banks for money to remain in Zambia for the country to benefit from the high costs.
The Economic Association of Zambia (EAZ) and the Development Association (PSDA) have both observed that the move would ensure the country benefited from the prevailing high copper prices.
The calls by these stakeholders follows an increase of copper prices which are currently trading above US$7, 000 a tonnes on the London Metal Exchange.
According to EAZ president, Crispin Mphuka, the move would also curb the habit of transfer pricing and the under declaration of the commodity by some mines.
Dr. Mphuka observed that Zambia would benefit from the rising copper prices if marketing of all minerals was localised.
He explained in an interview that most mining companies were fond of under declaring and transfer pricing particularly where commodity prices were high. “It is difficult to establish how much is being exported so the best is to localise marketing of copper and minerals, this will ensure the market functioning is fully based here then we can have access to all the information so that the marketing is not done by outside people because that is what is bringing transfer pricing,
“These guys (mines) under declare and claim tax so these are some of the things we need to look at, this will give us all the information required to establish the tax,” he said.
Dr. Mphuka said this solution would provide all the information required to capture how much was being exported.
“This is how the Value Added Tax issue came about from Zambia Revenue Authority. The problem which is there about mining is about information, mines have more information, ZRA which taxes have little information so it is an information problem,
“As a result, there will be higher returns and attract higher corporate taxes, but problem which is there is serious transfer pricing and under declaration of what exactly they make,” Dr. Mphuka said.
Meanwhile, PSDA chairperson, Yusuf Dodia, said it was about time Zambia begun to link all copper export earnings to commercial banks.
Mr. Dodia explained that would ensure all the money was circulated locally and invested in the economic sectors.
“As a country we should make sure that all exports earnings from copper must come to Zambian banks, let us have access to that huge amount of earnings. If copper prices are high, we will have more money coming into the economy. This will reduce needs by Government to be borrowing from the international market,” Mr. Dodia said.