Mining & Trade News

In order to enhance revenue collection from the minerals sector, Malawi Revenue Authority (MRA) has taken over the responsibility of collecting mineral royalties from the Ministry of Mining.

MRA’s spokesperson Steven Kapoloma says in an interview that the tax collecting body will start collecting the royalties from April 1, 2024.

“In view of this, MRA has been engaging mining companies to sensitize them on the transfer of collection of royalties. Mining companies will be required to conduct a self-assessment and file royalty return upon producing minerals,” says Kapoloma.

The royalty return is a declaration of values and volumes of the minerals which a company has to submit to the Department of Mines. Mining companies then have to determine whether the minerals are for export or local use.

Kapoloma said:  “If the minerals are not for local use, a mining company is required to declare interest to the Department of Mines to export.

“The Geological Survey will then evaluate the mineral royalty base to determine value and volume, issue a certificate of inspection and seal the container.”

“The Department of Mines will then process a royalty return and file the processed return to MRA through Msonkho Online.”

”Upon payment of mineral royalty, the Department of Mines will issue an export permit to the exporter.”

The Ministry of Mining has been collecting mineral royalties from mining companies in Malawi and this mandate came from the Mines and Minerals Act.

Though the Ministry has been collecting mineral royalties, Kapoloma says there have been challenges as far as capacity is concerned.

He, therefore, explains that in 2029 the Mines and Minerals Act and the Taxation Act were amended to transfer the collection of mineral royalties from the Ministry of Mining to MRA.

“The collection of mineral royalties has been transferred to MRA because it has the capacity to collect both tax and non-tax revenues,” says Kapoloma.

Meanwhile, MRA is developing an ICT system to facilitate the payment of mineral royalties through e-payment.

The Mines and Minerals Act 2023 says a holder of a mineral tenement who contravenes the law by not paying royalties, upon conviction, shall be liable to a fine of K10-million plus double the value of the minerals, transport, sale, pledging or other transfer and, to imprisonment for two years.

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