Impose profit tax on mines - Sardanis
Impose profit tax on mines - SardanisBy Carol Jilombo
Tuesday April 17, 2007 [09:19]
Businessman Andrew Sardanis has urged the government to impose windfall profit tax on the existing mines' development agreements as opposed to renegotiating them. In an interview after the launch of his book; "A Venture in Africa: The Challenges of African Business", Sardanis said the government should not waste its time trying to renegotiate the development agreements with the mines. He said renegotiations would take a long time as businesses had many ways of delaying things. Sardanis, who was the owner of the liquidated Pan African Bank, Meridien Biao, said the price of copper was currently extraordinarily high and the only way to boost the economy was to tax the mines.
He refuted concerns raised by some sectors of society that forcing the mines to renegotiate would jeopardize the relationships between the mines' management and the country. Impose profit tax on mines, says Sardanis "It won't be against the agreements, all governments do it, even Britain did," Sardanis (right) said. "With the price of copper the mines want to produce, they will accept it, we must not be behaving as if we are walking on eggs."
Sardanis said the mines should be made to face their responsibility even in the towns they operate from. "It is a disgrace, the mining townships have been allowed to disintegrate," he observed. "The miners deserve a higher emolument now that the price of copper is so high."
Sardanis also advised that as a country, Zambia should bring investors that would bring in a true development. "We have to accept investment at the levels of the mining industry but I do not see why we should call an investor someone who comes with two trucks and a pick," he said.
Sardanis said that in order to discourage such investors coming in, the business privileges accorded to them should be withdrawn. "Don't give them the privileges they have been getting, if they want to come to Zambia, they should take chances together with the local people, because some of them do not bring anything new," he said.
Sardanis earlier said, while launching the book that foreign investment should come in as an adjunct to local enterprises. He observed that foreign investors came in many guises.
Sardanis said foreign Direct investment 'gospel' was so deeply embedded in the minds of some African governments that foreign investors were given way to do whatever they want. "My fear is that, in the near term, like the colonial regimes of old, foreign investment will pursue its own goals on its own terms and remain a caste apart and like the colonial regimes it will delay the progress of local enterprises," he said.
Sardanis warned that such problems would continue until nations formalised their ideas about how to move forward.
Labels: ANDREW SARDANIS, BUSINESS, MARKETEERS, MINING, MINING CONTRACTS
posted by MrK @ 10:41 PM
1 Comments:
" "With the price of copper the mines want to produce, they will accept it, we must not be behaving as if we are walking on eggs." "
He would be if he had been the one taking the bribe to make sure the mining companies would not pay a cent in tax, ever, when these agreements were signed. :)
Even The Post is silent on the issue, which cries out for some investigative reporters. It is not enough to say that these agreements are bad, while watching the likes of Equinox taking hundreds of millions out of the country every year.
But I would agree that a windfall tax would at least be a compromise. Anything over $2000. Remember that at the time these contracts were signed, the copper price was under $1000 per tonne, so that must have looked pretty good to them at the time.
I would suggest that the Zambian government also lock in the price of copper, using futures and options in the international financial markets, so they are at least temporarily protected against any drop in price.
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