Maravi

(DAILY MAIL) Mine taxes are reasonable-UNZA don

Mine taxes are reasonable-UNZA don
By KANGWA MULENGA and JERRY MUNTHALI

UNIVERSITY of Zambia (UNZA) School of Mines academic Mathias Mpande says the new mine taxes are reasonable at the current copper prices. Speaking on Radio Phoenix’s “Let the People Talk” programme yesterday, Dr Mpande said there was no need for mine investors to dispute the proposed taxes because they have realised good profits since they bought the mines. Dr Mpande said Zambians have not benefited from the mines under the existing development agreements.

“For instance, Konkola Copper Mines has so far made a profit exceeding US$375 million against the US$40 million purchasing price of Nchanga mine. These new mine taxes should benefit the Zambian people,” Dr Mpande said.

He said the new taxes would help to remove discretion in the way returns on copper sales were being distributed by investors.

Dr Mpande urged Government to be firm and ensure that the new taxes were implemented. Dr Mphande served as Deputy Minister of Mines and Mineral Development under President Chiluba’s administration. He said the implementation of the new taxes would not attract any review of the development agreements.

Speaking on the same programme, Mine Workers Union of Zambia (MUZ) president Rayford Mbulu asked the mine investors to abide by the new taxes. Mr Mbulu said mine investors were making huge profits and so must not resist the new taxes.

He said the proposed taxes were not extraordinary because those were the ones obtaining on the world marke, including in Chile that has a reputation for high copper production.

“Zambians have not benefited from the mines and yet the mine owners have reaped billions of dollars in profits. Zambia must benefit from its mineral resources,” he said.

And Patriotic Front (PF) Nchanga member of Parliament, Wilbar Simusa, said ZCCM Investments Holdings (ZCCM–IH) must be aggressive in the collection of dividends from the mines where it owned shares.

“I am appealing to the ZCCM-IH to change their approach in demanding for dividends and become more aggressive if the people of Zambia are to benefit from the mineral resources God has given Zambia,” Mr Simusa said.

Several callers on the phone-in programme appealed to Government to be more aggressive in ensuring that the new mine taxes were implemented.

Meanwhile, the Bible Gospel Church in Africa (BIGOCA) has called on all Zambians to support the new mining tax regime because the increase from 31.7 per cent to 47 per cent was reasonable.

BIGOCA Overseer, Bishop Peter Ndhlovu, said this in a statement in Lusaka yesterday.

Bishop Ndhlovu said it was clear that foreign investors were not keen on sharing the profits with the people of Zambia in whom God vested the minerals they were extracting.

He wondered why the mining companies suggested a 12.5 per cent in windfall profit tax when the 25 per cent that Government proposed was generally acceptable.

“Effective mining taxes at 47 per cent from 31.7 per cent is reasonable because we have information, which even the investors have not refuted, that some countries charge as high as 52 per cent in effective aggregate taxes,” Bishop Ndhlovu said.

He called on all Zambians with the interest of the nation at heart to back Government on the new tax regime in the mining sector.

“It is yet another mark of greed by our colleagues who want to continue to reap while we watch without thinking about the benefits that should accrue to the owners of the land under which the minerals are extracted,” Bishop Ndhlovu said.

He urged Government not to backtrack on the taxes because the nation needed additional money to construct schools, hospitals, clinics and roads.

Bishop Ndhlovu said the arguments that the foreign investors had put in billions of dollars to expand and upgrade the mines including starting Greenfield mines were well appreciated.

But it had to be noted, too, that no mining firm had recorded any losses in the last five years.

He said Government must ensure that the proceeds from the mines are used prudently.

“It will be very sad to waste the resources after all the trouble we have gone through to make sure that the profits are shared equitably,” Bishop Ndhlovu said.

He proposed a special budgeting process to equitably distribute profits from the copper revenues to all the provinces for viable economic projects.

“People should be consulted in all the provinces to propose projects that will benefit them, be it construction of schools or clinics, so that everyone can benefit in the same way,” he said.

Labels: MATHIAS MPANDE, MUZ, RAYFORD MBULU, UNZA, WINDFALL TAX

posted by MrK @ 10:38 PM