A mine worker uses a front-loader at the Nchanga copper mine in Chingola, Zambia. Photo: Bloomberg.

INTERNATIONAL –  The Zambia Revenue Authority (ZRA) said on Friday an audit shows mining companies owe the government more than the state is due to pay them in tax refunds.

Mining companies have been demanding Zambia pay the $550-$600 million due to them in Value Added Tax (VAT) refunds.

“When we put together what we owe the mining companies compared with what they are owing, you find that on the balance of numbers they are actually owing more,” ZRA Commissioner-General Kingsley Chanda said at a media briefing.

Chanda did not say how much mining companies owed the state but said it included penalties and interest. Mining companies pay government royalties and tax.

This comes after a senior government official said on Thursday that mining companies operating in Zambia have failed to show how higher taxes introduced this year will affect their profitability despite objecting to the new framework. 

The country, Africa’s second-largest copper producer, increased its sliding scale for royalties of 4 percent to 6 percent by 1.5 percentage points from January 1 and introduced a new 10 percent tax when the price of copper exceeds $7 500 (R108 956) per ton.