Maravi

Lubinda accuses MMD of complicity with mines

COMMENT - Why is exploration more important than collecting a $1.2 billion a year from the mines? When was the last time any MMD politician said no to money? I will say that they are getting paid already, by the mines, so the mines won't have to pay taxes. And they are stealing the Zambian people and economy blind. The mines, in collusion with the directors of ZCCM-IH, are not even paying dividends to their shareholders. They are committing fraud. And they seem determined to fleece Zambia from every penny it has. And the excuse that a windfall tax will 'chase away' miners when prices are at record highs is pathetic. India is also introducing a windfall tax on iron - of course their mining companies are all Indian, so they're not moving anywhere.

Lubinda accuses MMD of complicity with mines
By Kabanda Chulu in Kitwe
Wed 19 May 2010, 04:01 CAT

PARLIAMENTARY Committee on Estimates chairperson Given Lubinda has accused the MMD government of complicity with mining companies hence its failure to re-introduce windfall taxes despite higher copper prices. But Minister of Mines Maxwell Mwale said re-introducing the windfall tax would threaten the future of the mining industry in the country.

Commenting on the decision taken by Australian Prime Minister Kevin Rudd to introduce a 40 per cent tax on mining profits starting in 2012 that would result in raising US$11.1 billion in its first two years, Lubinda said Rudd was breathing a fresh air in his country which was blowing towards mineral resource countries like Zambia.

“Bravo to Rudd since he has shown that he can go beyond personal gratitude and thinking more about national prosperity and the responsibility of any elected leader should be towards the nation and its people and everything else is secondary and this is what Rudd has shown us,” Lubinda said.

“And if majority Zambians are calling for the re-introduction of windfall taxes, it doesn’t mean they are enemies of development and there must be underlying reasons why mines minister Maxwell Mwale and finance minister Situmbeko Musokotwane don’t want this tax. There must be complicity with those mining companies and we want them to demonstrate how Zambia will benefit from the mines since Musokotwane has failed to tell us projected revenue figures.”

In the 2010 budget, Musokotwane has only estimated to raise K244 billion from mineral royalties but failed to estimate how much will be raised from other mining taxes. Lubinda said it was shameful for Mwale to ignorantly think that investors in Australia would migrate to Zambia or Africa.

“It will come to pass and no industry in Australia will close down as a result of the 40 per cent mining tax and we shall wait to see if those industrialists will come to Zambia because President Banda, Mwale, Musokotwane and their government removed the windfall tax and introduced profit variable tax which is difficult to collect and this is why they have failed to project revenue figures,” said Lubinda.

“We still lack capacity to carry out forensic financial audits for the mines and this is why we need to have simple taxes in place like the windfall because with the variable profit tax, Zambia is at the mercy of mining companies and their sophisticated accountants can hide or cook figures to show losses even when they have made profits. So it is difficult to apply variable tax.”

However, Mwale argued that the future prospects of mining lies in exploration and re-introducing the windfall taxes would threaten such activities.

“Others may not know what windfall taxes do to exploration and this is why we are happy with the decision taken by the Australian government to introduce super profit taxes which are like a windfall tax, hence they will chase away investors to Africa,” he said.

Last week, Rudd announced that the 40 per cent tax on mining profits would help the government pay for additional hospitals, retirement benefits and company tax reductions.

“Australians had been shortchanged during a 10-year resources boom in which profits soared by US $ 81 billion but only US $ 10 billion flowed into national coffers,” stated Rudd. “BHP is 40 per cent foreign owned, Rio Tinto is more than 70 cent foreign owned, that means that these massively increased profits built on Australian resources, are mostly in fact going overseas.”

Labels: CORRUPTION, GIVEN LUBINDA, KEVIN RUDD, MAXWELL MWALE, SITUMBEKO MUSOKOTWANE, WINDFALL TAX

posted by MrK @ 5:16 AM