Zambia won’t reintroduce high mine taxes
Zambia, Africa’s top copper producer, will maintain existing mining taxes over the long term even after it scrapped development agreements it had with mining companies, Finance Minister Situmbeko Musokotwane said.
Musokotwane said at a media briefing in Lusaka on Saturday that Zambia did not intend to reintroduce a 25 percent mining windfall tax because that could force some mining companies to close.
The Chamber of Mines of Zambia, which represents foreign mining companies, said this week Zambia faced an uncertain long-term mining outlook despite a resurgence in copper prices and government assurances of stable mining taxes in 2010.
“The most important thing is stability in taxes at a reasonable level for both the investors and the people of Zambia, which I can guarantee. It should not necessarily be by law,” Musokotwane said.
Musokotwane said most of the mines had invested very heavily in new equipment and needed to be given time to recover from initial losses before they could be taxed.
Musokotwane said although the price of copper had risen, the government would not bring back high mining taxes it scrapped earlier this year because that would neither be in the interest of the country nor the investors.
“If we impose tax on revenue on old mines they will end up closing and we don’t want to head in that direction. We don’t want to create job losses,” Musokotwane said.
Musokotwane said foreign investors need not be skeptical over Zambia’s mining prospects because the country realised attracting Foreign Direct Investment (FDI) was key to development
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Engineer, lest you have forgotten: ZCCM was 100% owned by ourselves. What happened to it? It is our usual greed that makes every good intention a non-starter.
Well really, I agree with variable tax as opposed to windfall beacuse it taxes profits. This makes better sense than tax based on price. Firms have different cost structures and thats why Luanshya nearly closed.
What’s wrong with us Zambians? Why cant we reposes all our mines and be given to competent Zambians to run? This will enable us use all the billion Dollars profits the foreigners are making on the development of our Country. We have had very good Mining Engineers, Metallurgists, Geologists, etc who have graduated from our own Universities, surely they can manage to sustain operations of the mines. Why should we assist foreign nationals to take all our GOD given natural resources at the expense of the poor Zambians?
I had held Musokotwane, Finance Minister in high esteem but ve realised that his is just another chap from the old school. He’s thinking is not current but in the old economic theory. The asset he is saying we can not introduce windfall tax on are our resources and we have a right to enjoy what comes from them. He should have consulted widely before making his wild statement. We demanded for such tax from the time our mines were privatised and my late president and his Finance Minister in 2007 agreed to implement as such. If the foreigners are not ready to pay us enough tax from our resource let them pack and go to their homes and we will keep our resources for the future generation which will be more organised. Moreover, that is what we call sustainable development. Situmbeko knows that his village has no proper school, health facility, proper road infrastructure, in Liuwa National Park and instead of generating more cash to develop rural areas including his area, he decides to implement weird mining tax. It has shown that he is living in the past and will benefit nothing from him being at the helm of finance ministry.
This man is clearly behaving like he is a bought agent of the mineowners. Why do we tolerate such crooks in public office?
Watchedog why have you blocked comment on the kawalala’s trip to SA???? you guys are now puppets i guess
This is how silly we, as Zambians, shall always remain. We always want to please outsiders at the expense of our national development. Copper is a diminishing resource. It is therefore sensible that we reap the greatest benefit whilst its still profitable to do so.
Britain and France are now working very hard at introducing one off taxes for Bankers profits. Why can’t Zambia introduce a one off tax on it’s mineral resource??