Zambia backs down over mineral tax

By Hicks Sikazwe

Government has backed down over the controversial eight and 20 percent mineral tax effected in January after concerted pressure from mine owners. Following an order by President Edgar Lungu on March 28 to the Ministry of Finance and Mines, Cabinet on Monday approved the changes to the tax.

“Cabinet has today approved changes to the mineral royalty regime and the president has directed the ministers to bring to Cabinet next Monday to be presented to Parliament” said a statement from State house on Monday, The statement noted that the changes were as a result of wide consultation in the mining industry. No figures of the review were given, but mine owners have been insisting that government goes back to the 2014 tax regime.

The World Bank has since warned that any review to the mineral tax would have implications on the 2015 budget. Government in January increased mineral tax from six to eight percent for underground mining and six to 20 percent for open pit operations. Barrick Gold Corperation threatened to pull out of Lumwana if government stuck to the new tax which has since been passed into law. According to mining companies the tax increase was too high at a time copper prices had gone down.

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