The Chamber of Mines in Africa’s second largest red metal hotspot, Zambia has called for a revisiting of the mining tax regime as the Ministry of Finance prepares to unleash the 2020 estimates of revenue and expenditure. The mining lobby group expects a sliding from a step scale, Chief Executive Sokwani Chilembo said in a interview. Chilembo proposed that the non tax deductibility on mineral royalty taxes be reconsidered in the same fashion Zambia’s peers such as Zimbabwe and Namibia have. He bemoaned import duty on concentrates which has weighed on the copper producers ability to produce sulphuric acid.
The chamber has called for eradication of export duties on gemstones as this has adversely impacted the colored stone industry impacting the company’s ability to pay dividends to the government. Also proposed was the rethinking of the sales tax regime which the chamber did give proposals on.
Earlier in the week the chamber forecasted a 100,000 metric ton decline in the 2019 red metal copper production compared to last year.
Zambia implemented a tax regime effective 01 Jan 2019 that saw an increase in mineral royalty taxes across the scale with additional import and export duties which miners have dubbed as increasing the operational burden and narrowing their propensity to invest in exploration. Investment sentiment in mining has been kept on the radar given the recent legal impasse between Vedanta’s KCM and minority’s shareholder ZCCM-IH with the matter under litigation. The copper producer grapples with an energy deficit that has impacted productivity in addition to suppressed global prices that price at lows as a reflection on weak aggregate demand.
Business Telegraph Mining Desk
