Former Mines Minister Mathias Mphande has encouraged the Government not be blackmailed by mining companies following the announced changes to the mining tax system.
In her 2019 national budget presentation, Finance Minister Margaret Mwanakatwe announced plans to increase the country’s sliding scale for royalties of 4 to 6 percent by 1.5 percentage points and introduce a new 10 percent tax when the price of copper exceeds $7,500 per tonne.
A new 15 percent export duty on precious metals, including gold and gemstones, will be introduced, while copper and cobalt concentrate imports will incur a new 5 percent levy.
The government is proposing to increase Mineral Royalty Rates between 25% and 67% across the different price bands, MRT payments will no longer be deductible against Corporate Income Tax, introduce Sales Tax to replace Value Added Tax and introduction of 15% Export Duty among other changes.
But Dr. Mphande, who is also former Lecturer at University of Zambia (UNZA) School of Mines, says the government should maintain the new tax system in order for the country to get its fair share from its mineral resources.
Dr. Mphande tells Money FM Business News that the government should not bow down to pressure coming from mines after it constituted a Tax Policy Review Committee to revert back to the old mine tax system.
He cites countries such as Canada that has about 18 percent of mineral royalty rate and that the country is benefiting a lot.
“The only significant money we made from the mines was somewhere in 2006 when I and Honorable Ng’andu Magande were able to get taxes from mines due to the tax system that was in place,” he said.