Finance Minister Alexander Chikwanda

Zambia eager to resolve new mine tax row

By Hicks Sikazwe

Zambia is committed to see that mine companies operating in the country make profit while jobs are fully protected, President Lungu has said.

The president, in a clear intervention of the current row over the new open pit mining tax and unpaid VAT refunds, has directed the Zambia Revenue, Authority to expedite discussions with the firms and ensure the issues are immediately resolved.

“I want to see increased dialogue and increased flow of information that in fact we have been talking to the mine owners over these matters,” he told a special cabinet session held in Lusaka recently.

There has been a protracted row over the review of open pit mining tax from six to 20 percent with investors fearing a drop in production and subsequent loss of jobs.

Barrick Gold, one of the operators has since threatened to pull out from Lumwana near Solwezi in North Western Province.

But Lungu assured the nation, “the ultimate aim is to protect jobs and keep mines profitable at the same time. We must also maintain the country’s right to collect due taxes.”

He said it was important to clear apparent false hoods that certain quarters he could not name were peddling to poison public perception.

Last year Parliament approved a proposal to increase open pit mining tax to improve revenues from copper proceeds the largest contributor to the country’s foreign exchange earnings and the entire economy.

Government and mining companies have also been wrangling over VAT refunds to which the President has directed that in view of the legal dilemma that has arisen, new negations must open to address mechanisms to be used to settle the outstanding amounts.

Finance Minister Alexander Chikwanda, during the same cabinet session, reported that a statutory instrument (SI) to outline VAT refunds mode would be issued within days.

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