Maravi

No mining company is on tax holiday - Magande

No mining company is on tax holiday - Magande
By Speedwell Mupuchi
Friday March 02, 2007 [02:00]

THERE is no single mining company on tax holiday, finance minister Ng'andu Magande has said. And Magande told Parliament on Wednesday that achieving the targeted five per cent end of year inflation this year would be a toll order. Winding debate of the budget speech, Magande said government was not giving any tax holidays to those investing in mining sector.

He explained that corporate tax for mines making a profit was 25 per cent. Magande said most mining companies had not yet started paying the 25 per cent corporate tax because they were still investing. "KCM (Konkola Copper Mines) is investing all of its profits in Konkola Deep Mining Project. Once they start making profits they will pay 25 per cent tax as per development agreement," Magande said. "We need to be very careful not to scare our investors sinking their money into a 1.5 kilometre mine shaft. If you went to Konkola you will find some of the sophisticated mining equipment in the world." Magande said the new tax regime for mines was attractive enough and that government hoped to develop the mining sector to be one of the best in the world. Corporate tax is only paid if a company is declaring profit and most companies are hiding in re-investment to avoid paying the tax.

And Magande said with the reported 12 per cent inflation level for February 2007 announced by the Central Statistical Office, the targeted end of year inflation level of five might be a toll order. "This time of the year we usually have high inflation rates because the crops are still in the fields," Magande said. From the last quarter of last year inflation dropped to a single digit reaching eight per cent by the end of the year. Magande called on the House to support measures to increase tax threshold from K320,000 to K500,000. He also said government was concerned about management of limited public resources and extended President Levy Mwanawasa's invitation to members of parliament to supervise their use. He also said he did not subscribe to the idea of increasing Constituency Development Fund to K1 billion.

Magande said members of parliament should instead acquaint themselves with learning to understand how councils operated and how to supervise resources. "Allocating K1 billion is an easiest way of throwing money," Magande said amid murmurs from members of parliament. However, Magande said the CDF had been increased from K60 million to about K200 million.

Labels: MAGANDE, MINING, TAXATION

posted by MrK @ 3:39 AM