CUTS calls for the addressing of imbalances in mining revenue

Consumer Unit and Trust Society (CUTS) says there is need to address the imbalances with regard to the actual revenue being generated by the mining sector.

CUTS centre Coordinator Simon Ngona says it unfortunate that the reports for 2012 and 2013 done by the Extractive Industry Transparency Initiative (EITI) have continued to show that there is something wrong between government and the mining sector.

Mr. Ngona says it is of great concern to have inaccurate figures on the actual revenue being generated by the mining companies if the country has to benefit fairly from the mineral royalty tax.

According the EITI 2012 and 2013 reports, for the third year in a row, the mining sector generated roughly US $1.5 billion in revenue in 2013, representing nearly 30% of total government income.

The EITI Reports also indicate that copper production increased by over 8% from 2012 to 2013 with foreign investment helping push production levels up in 2012 alone, with more than US$4 billion invested in the mining sector.

Despite the hike in productivity, government revenue rose only slightly in 2013, partly because the average price for copper decreased.

In 2013, royalty payments represented 21% of government revenue from the sector, a bigger share than in the previous years.

In addition to higher production, this was due to an increase in the royalty rate.

Corporate income tax payments, on the other hand, were lower in 2013. This was partly because lower copper prices hit mining companies’ profits in 2013.