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JCTR urges policy consistency on mine taxes

THE Jesuit Centre for Theological Reflection has called for good leadership and consistent economic policy from the new government over mine taxes.JCTR stated that leadership exhibited on the impasse surrounding the new mining tax regime does not inspire confidence and is a source of concern.

JCTR wondered if the new mining tax regime announced in the 2015 budget was subject to negotiation and who was in charge of such discussions.

“This is of serious concern for the Centre due to its adverse impact on the livelihoods of the mine workers as well as government revenues. On one hand, the jobs of many hang in the balance as the mining companies leverage them for a more favourable tax regime while on the other hand, the government’s 2015 budget risks being unbalanced. There is, therefore, need for good leadership and consistent economic policy from the new government even as they settle down,” it noted as it released its January 2015 Basic Needs Basket for Lusaka.
JCTR stated that the conflicting statements from President Edgar Lungu, Minister of Finance Alexander Chikwanda and his commerce counterpart, Margaret Mwanakatwe, on the new mining tax regime as to whether to subject it to revision do not reflect well on the government and risk destabilising the economy and cost of living for the majority Zambians.

President Lungu had directed the ZRA to speedily end the two-fold disputes following complaints from the Chamber of Mines of Zambia that the higher royalties could force shaft closures and loss of about 12,000 jobs.

Mwanakatwe also told delegates at the Indaba mining conference in South Africa recently that payment of mining royalties could be deferred until companies had sufficient cash flow if they were not in a position to pay immediately.

But Chikwanda has seemingly remained resolute over the tax regime, saying there should be no cause for panic and blackmail from any quarters.

“It should be realised that lives of people are at stake and so, care must be taken in handling the issue of mining tax,” the JCTR warned.

It also called on the government to come up with a clear direction for mining taxation as this could help ease the troubles currently being faced with the falling kwacha and imminent rising interest rates that would further push up costs of various items on the Basic Needs Basket.
“The government should also be concise and comprehensive in reducing the cost of living, not just in the short term but to find lasting solutions for these inconsistencies in the cost of living,” it stated.

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