Envoy advises govt to revise mine tax

Envoy advises govt to revise mine tax
By Joseph Mwenda
Tue 23 Nov. 2010, 04:01 CAT

THE US envoy to Zambia says the government should take advantage of the high mineral prices and increase revenue from the mining sector. Ambassador Mark Storella advised the government to consider revising mineral taxation policies following the increased copper prices. He observed that Zambia was in a vulnerable position economically because of its strong reliance on copper.

“The policies put in place have been successful so far, but we are now at a point where Zambia really stands to do better and should do better in terms of collecting its revenue from copper,” Ambassador Storella said in an interview on Friday.

“It’s reasonable for the government to look at how they collect their revenues in future, to make sure that they are getting the right kind of balance.”

He said the price of copper on the global market had a direct impact on the Zambian economy and revenue collection.

“When the economy of the world turned down, there was a plummet in the price of copper and the Zambian government took steps to try and make investment more attractive and included easing up on taxation. It was a success story because, in fact, Zambia did not have an economic downturn when the rest of the world including the United States was affected. Zambia continued to grow during that period,” Ambassador Storella said.

He said it was the best time for the country to capitalise on the increased mine investments, especially that the value of mineral resources was hitting an all-time record.

“What I think Zambia needs now is to increase revenues through what are really important investments that have taken place and also increase production, at a very high price of copper as it is nearing the all-time record today,” said Ambassador Storella.

Copper is currently pegged at US$8,500 per tonne on the international market.