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(LUSAKATIMES) Sata’s inconsistent — Ronnie

Sata’s inconsistent — Ronnie
Monday, September 6, 2010, 9:06

PF Leader Michael Sata (left)
The Government has said the U-turn by Patriotic Front (PF) president Michael Sata on mining taxes is a clear sign that the opposition leader is inconsistent on various national matters.

Chief Government spokesperson Ronnie Shikapwasha said in Lusaka yesterday that the Government had been focused and consistent in everything it did in the mining industry for the benefit of the miners and the Zambian people.

When the Government in 2008 introduced the windfall tax, Mr Sata was against the idea saying the tax was to blame for the job losses and reduced investments in the country’s copper mining sector.

He said at the time that the tax regime had hiked tax rates in the sector by more than 50 per cent and increased mining costs.

Mr Sata on Friday told Reuters news agency that the Government should restore mining agreements with foreign investors which it cancelled and reinstate tax concessions, in a major u-turn from his previous position.

Mr Sata, previously a strong advocate of higher mine taxes, said the Government should reinstate development agreements it signed with the foreign investors to restore investor confidence and attract further investments.

Some foreign investors such as Canada’s First Quantum Minerals have threatened to take Zambia to court for suspending the development agreements, which waived payment of taxes by the foreign mines for periods of between five to 17 years.

Zambia’s mine taxes include a 15 per cent profit variable tax, 25 per cent corporate tax and a three per cent mineral royalty.

Mines Minister Maxwell Mwale said Mr Sata’s comments were aimed at wooing voters ahead of the 2011 presidential election.

“The PF leader has always advocated higher mining taxes but has now changed…,” Mr Mwale told Reuters.

Finance and National Planning Minister Situmbeko Musokotwane said in April that although the Government was talking to the mining firms on the development agreements, it expected them to accept the existing taxes, especially after Zambia scrapped a controversial 25 per cent windfall tax.

Foreign mining companies operating in Zambia include London-listed Vedanta Reources Plc, Equinox Minerals, Glencore International AG of Switzerland and Metorex of South Africa.

Lieutenant General Shikapwasha, who was responding to questions from journalists at Lusaka International Airport, said the Government had proved that its policies were better even if Mr Sata was known for constantly criticising them.

He said the mining sector was booming and the economy in general was growing.
[ Times of Zambia ]

Labels: MICHAEL SATA, MINING, RONNIE SHIKAPWASHA, WINDFALL TAX

posted by MrK @ 5:30 PM