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(STICKY) Parliamentary Committee takes Bantubonse to task over windfall tax

COMMENT - More arrogance from the mines. Not contented with the abolition of the windfall tax, they want the abolition of the variable profit tax as well. According to mr. Bantubonse, the mining sector does not need to support us, we need to support the mining sector. How long will the Zambian people be taken for a ride?

Parliamentary Committee takes Bantubonse to task over windfall tax
By Florence Bupe
Mon 18 Oct. 2010, 18:50 CAT

THE expanded Parliamentary Committee on Estimates yesterday took to task Chamber of Mines of Zambia general manager Frederick Bantubonse for commending government on its continued refusal to re-introduce windfall tax for mining companies.

The Chamber of Mines appeared before the committee to make its submissions on the 2011 National Budget that was recently unveiled by government. In his submission, Bantubonse said it was good that government had not succumbed to pressure to have the windfall tax re-introduced for mining firms.

“The importance of mining to the Zambia economy cannot be overemphasised. The mining sector, therefore, needs to be supported by everyone to enable it grow,” Bantubonse said. “It is in this vein that we salute and support the stand taken by the finance minister not to succumb to public pressure to reintroduce the windfall tax.”

Bantubonse further submitted that government should remove the variable profits tax, much to the annoyance of the members of the committee.

He argued that removing the variable profits tax would boost investor confidence and allow the mining sector to grow and in the long term contribute more meaningfully to the national economic growth.

Bantubonse claimed that Zambia’s calculation of the windfall tax in the sense it was proposed for implementation was too high and could have completely killed the mining industry.

“With the windfall tax in place, experts had worked out that the effective tax rate was over 80 per cent. This is clearly unworkable and could have killed the investments into mining projects. We further agree with the finance minister that no mining country in the world has the windfall tax in the form that it was formulated in Zambia,” he said.

But committee chairperson Highvie Hamududu warned Bantubonse against taking the emotions of Zambians for granted.

“The statement that you are happy that government has withstood public pressure on the windfall tax is very serious and it could have serious implications.

Zambians, who are the public in this case, are the owners of the land and therefore, the minerals, and you are happy that the concerns of the owners are not being taken into account?” Hamududu questioned.

Luena member of parliament Charles Milupi also questioned the premise on which Bantubonse was defending the foreign mines on the payment of tax. He also differed with Bantubonse on his argument that mines were actually in a way paying windfall tax through variable profits tax.

Milupi cautioned Bantubonse against misleading the public by suggesting that windfall tax was equivalent to variable profits tax.


There have been consistent calls for government to reintroduce windfall tax as a sure way of the country benefiting more meaningfully from the mining industry but government has remained adamant.

Labels: CHARLES MILUPI, FREDERICK BANTUBONSE, HIGHVIE HAMUDUDU, PARLIAMENTARY ESTIMATES COMMITTEE

posted by MrK @ 5:05 AM