Maravi

Shakafuswa attributes mine windfall tax to public pressure

Shakafuswa attributes mine windfall tax to public pressure
By Chiwoyu Sinyangwe and Joan Chirwa
Saturday January 19, 2008 [03:00]

GOVERNMENT’S decision to impose a windfall tax on mining companies has resulted from public pressure, the Ministry of Finance and National Planning has disclosed. And an international business consultant Trevor Simumba said revenue gained from the windfall tax imposed on the mines should not be used for personal emoluments for the government workers but must be channelled to basic sectors.

Finance deputy minister Jonas Shakafuswa said the government made an ‘executive decision’ to impose a windfall tax on mining companies following public concerns on revenue currently being collected from mineral resources.

Shakafuswa said the government could not wait for conclusion of the renegotiation of development agreements with the mines before increasing the new mining taxes, saying ‘the process was taking rather long’.

“Being a listening President, President Mwanawasa listened to the calls of Zambian people who were calling for increasing mineral taxes in mining sector and that is why we started renegotiating the development agreements,” Shakafuswa said. “But when we realised the renegotiation process was taking long, the President made an executive decision of imposing a windfall tax which is going to come into effect immediately after the presentation of this year’s national budget.”

Shakafuswa urged mining companies in the country not to resist the new tax regime in the mining sector as doing so would ‘tarnish the image of multinational companies’. “Our colleagues should understand that the Zambian people are in a hurry to develop and they should not frustrate this because this decision was made by the government based on the wishes of the Zambian people,” said Shakafuswa. “So if they decide to resist these changes, they will be leaving a bad legacy not only for themselves but for all international companies. And remember, these changes are a call of the people, so if they want to frustrate this decision, then they will face the wrath of Zambian people.”

A number of mining companies in the country have however not made their position known over the new mining regime, indicating that consultations were being made before public statements could be made.

And Simumba said revenue from windfall taxes from mining companies should be used to improve services in health, education and other social sectors.

“Finally the government has listened to us. I hope this time implementation will be effected because last time the three per cent royalty tax was not implemented. It is also important that the extra revenue earned is directed towards socio economic sectors such as hospitals, schools, doctor/nurse salaries and teacher salaries as well as infrastructure development that will further enhance mining, industrial and agricultural development,” said Simumba.

Labels: ACTIVISM, SHAKAFUSWA, WINDFALL TAX

posted by MrK @ 5:27 AM