Maravi

‘Govt should reveal mine tax terms’

‘Govt should reveal mine tax terms’
By Chiwoyu Sinyangwe
Thu 02 Dec. 2010, 03:59 CAT

THE government should disclose the terms under which it has agreed the new tax regime with the foreign mining firms, says the Economics Association of Zambia. Last week, finance minister Dr Situmbeko Musokotwane announced that the government had reached a deal with foreign mining companies whose long-term agreements the government had cancelled in 2008 to introduce higher taxes.

Dr Musokotwane said mining companies agreed to pay taxes based on the current tax regime and to pay K413 billion more in tax arrears than estimated in the 2011 budget.EAZ president Noel Nkoma said the failure to disclose the contents of the agreement raised suspicion among key stakeholders.

“For the purpose of transparency, the government should be able to come out publicly and say we engaged the mines…” Nkoma said.

He warned that the lack of transparency might lead to a repeat of the one-sided Developmental Agreements (DAs) which suffocated the country’s ability to raise mining tax revenues even in face of record high metal prices.

“As EAZ, we equally share concerns that have been raised by various interest groups,” Nkoma said.

“What we are interested in as Zambians is we want to see the things that have been adjusted in the tax regime. Which taxes have they adjusted? Is it the mineral royalty or what other interventions they are able to put in place to realize equitable deal.”

Nkoma said there was room in the current structure to raise mine taxes without stifling growth of the country’s mainstay. He said given the current copper prices, Zambians could benefit more if the government increased the revenue from the mines.

“In no way are we suggesting that we should be able to suffocate the mines to a point whereby they are not able to operate profitably,” said Nkoma.

Labels: DEVELOPMENT AGREEMENTS, NOEL NKOMA, WINDFALL TAX

posted by MrK @ 7:44 AM