Maravi

New mining taxes are not negotiable, insists Magande

New mining taxes are not negotiable, insists Magande
By Chiwoyu Sinyangwe and Joan Chirwa
Monday February 04, 2008 [03:00]

THERE will be no room for the mines to negotiate with the government the new mining fiscal regime, finance minister Ng’andu Magande (right) has declared. And international business consultant Trevor Simumba has said stakeholders are keenly awaiting the implementation of the new mining taxes by the government. In an interview, Magande explained that the government would not consult the mining companies before effecting the new mining taxes announced in this year’s budget.

He further said there was no link between the new mining taxes and the Development Agreements that the government signed with the mining companies.

“Do we consult you when we increase Pay As You Earn (PAYE)?” Magande asked. “If we do not consult you, why should we consult them (mining companies)? So there is no room for negotiations and all we are waiting for is for Parliament to approve and then we shall go and implement.”

Asked to comment on concerns that government should make public the outcome of the development agreements renegotiation process embarked on last year, Magande said:

“That team we constituted was the one that came up with the recommendations on the new tax regime that we have imposed on the mining companies so that we get a fair return on our resource. It was not about going to renegotiate with the mining companies because the government does not negotiate with anyone when it wants to impose tax.”

Magande dismissed assertions that the new mining taxes would affect possible investments in the sector, saying investment decisions were made by individual companies.

But Luanshya Copper Mines (LCM) chief executive officer Derek Webbstock said many mining companies were still trying to understand the finer details of the new mining tax regime.

“Government got to do something. Unfortunately, government has got to please as many people as it can,” Webbstock said. “We don’t understand some of the finer details, yet, of the new tax regime. It’s not ideal to happen this way. We will always argue on one side but there will still be people to invest.”

And Simumba said the government’s announcement of new mining taxes was what stakeholders had been waiting for.

“Yes, renegotiations are no longer necessary because once the budget is passed the income tax Act will be amended to reflect the windfall tax and all the other taxes raised. This is what we have been saying all these years.

The fact is the government never really negotiated anything. We still have to watch and see how effective the new taxes will be implemented,” Simumba said.

“Parliament is the only body that can enact a law that is above any other law within the country. So the tax provisions in the DA’s (development agreements) will become null and void as soon as the budget is passed by parliament.”

Labels: MAGANDE, WINDFALL TAX

posted by MrK @ 3:59 AM