ONLY two mining companies pay corporate taxes

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ONLY two mining companies have been paying corporate taxes hence Government’s decision to redesign the mining fiscal regime that will bring on board more mining companies in the base, Minister of Mines, Energy and Water development Christopher Yaluma has said.
Government has in the 2015 budget proposed the redesigning of the mining fiscal regime that will entail underground mining operations paying eight percent mineral royalty and open cast mining operations paying 20 percent mineral, respectively.
Mr Yaluma did not disclose which mines are paying tax but said the current mining regime is unsustainable, unfair to the few that pay taxes and that the proposed measures will address the imbalances.
“You may be aware that despite record levels of production and revenues in excess of US$6 billion per annum, only two key mines pay corporation taxes. In our view, as custodians of a wasting natural resource, the current situation was unsustainable, unfair to the few actually paying taxes and the proposed measures address this imbalance,” he said.
Mr Yaluma said this during a KPMG 2015 budget analysis yesterday.
He also said there is need for continued dialogue on the Value Added Tax (VAT) rule no.18 to ensure a win-win situation between mine operators and the country.
“The sales of the commodities have not been so transparent so to speak and we want to do what is right because we are liable to the Zambian people. We must be transparent to the people and let them know that this is what it [copper] fetches.  We must give them the right figure because it hinges on the economy,” he said.
The Zambia Revenue Authority (ZRA) has withheld about K3.5 billion from July 31, this year on account of tax-payers who have declared zero-rated sales (exports) but have not furnished all the required documents.
Mr Yaluma said ensuring an enabling environment for mining companies remains Government’s agenda, hence the need to dialogue on the “controversial” VAT rule 18.
At the same discussion, Chamber of Mines president Jackson Sikamo said the new mining fiscal regime will negatively affect mining operations as tax will be based on production and not profits.

 

Zambia Daily Mail

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