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Surrender of mines has placed Zambia at owners’ generosity – Kabeta

Surrender of mines has placed Zambia at owners’ generosity – Kabeta
By Kabanda Chulu
Tue 20 Oct. 2009, 09:11 CAT

ZAMBIA Institute of Certified Accountants (ZICA) executive director Hapenga Kabeta has said the surrender of mines and mineral rights has placed the country at the generosity of mine owners.

Appearing before the expanded parliamentary committee on estimates in Lusaka, Kabeta said Zambians through payment of taxes were helping the mining companies to pay back their loans.

He said it would be appropriate to re-consider the windfall tax where the cost of production was estimated on average at US $3,000 per metric tonne especially that the current price stands at US $6,000 per metric tonne.

“It is only prudent that a higher contribution is provided by mining companies since we have literally surrendered the country’s mines and mineral rights and we are at the generosity of mine owners and through our taxes we are helping them mines pay back the loans they borrowed because their contribution is less compared to pay as you earn (PAYE),” Kabeta said.

“And we do not know to what extent the variable tax will have been included in projected revenues from mines, besides the variable tax which replaced the windfall tax is difficult to administer since it is paid only after profits and with all those calculations involved, issues of costs will arise and who is going to bear those costs hence the windfall tax could have been useful with current copper prices.”

He said the projected revenue of K244.3 billion to be raised from mineral royalty represents not more than two per cent on an extractive business industry.

“This amount ought to be weighted against expected copper metal exports of US $3.851 billion at the price of US $6,000 per metric tonne for the projected 648,500 metric tonnes to be produced in 2009,” said Kabeta.

Labels: HAPENGA KABETA, MINING, NEOLIBERALISM, PRIVATISATION, WINDFALL TAX, ZICA

posted by MrK @ 5:56 PM