Zambia has initiated to become a “Compliant" country in the global Extractive Industries Transparency Initiative (“EITI”). To achieve this, Zambia is required to undertake an Independent Reconciliation on selected payments made by certain Extractive Companies with income received by the Government Agencies.
The Independent Reconciliation is part of a wider process for Zambia to become a “Compliant” country and in this regard PricewaterhouseCoopers Limited have been engaged as the Independent Reconciler. This report summarises our findings from the first Independent Reconciliation covering the period 1 January 2008 to 31 December 2008.
Summary Results of the Independent Reconciliation
- Based on the submitted Reporting Templates we have identified that Extractive Companies over reported ZMK217bn (approximately US$58m+) and under reported ZMK204bn (approximately US$54m) in respective Government Agencies.
- The over reported and under reported amounts gave rise to combined discrepancies of ZMK421bn (approximately US$112m)
- Of the total discrepancies of ZMK421bn (approximately US$112m), approximately ZMK174bn (approximately US$46m) of these discrepancies have been resolved, leaving ZMK247bn (approximately US$65m) of unresolved discrepancies.
- 86% of the unresolved discrepancies have arisen from four payment streams, namely Nonrefundable VAT (35%), Import VAT (26%), Custom/Import Duty (16%) and Corporate Tax (9%).
- It should be noted that the remaining unresolved discrepancies of ZMK247bn (approximately US$66m) are not necessarily missing payments from Extractive Companies but rather discrepancies which we have been unable to investigate further and conclude there on due to the limited supporting documentation and the limited timeframe of the Independent Reconciliation.