Maravi

UNCTAD recommends increased mine taxes

COMMENT - " Over US$4 billion Foreign Direct Investments (FDI) poured into mining since 2000 " and well over $10 billion flowed out as untaxed and unshared profits.

UNCTAD recommends increased mine taxes
By Chiwoyu Sinyangwe
Fri 24 Dec. 2010, 04:00 CAT

THE huge amounts of foreign capital going into the mining sector will not help the Zambian economy but only accelerate exploitation of copper, says UNCTAD.

United Nations Conference on Trade and Development (UNCTAD) head of macroeconomic and development branch Detlef Kotte said there was need for the government to find a way of tapping into the benefits from the current record-high copper prices.

“In Zambia, most of the FDI goes into copper mining and that’s fine,” Kotte said in an interview. “But that doesn’t help your economy in the long term; it just helps to exploit the copper resources faster. So you need some mechanism that transfers the benefits…the rents generated in the mining sector to other industries, to manufacturing, service sectors.”

Kotte said there was need to increase taxes from the mining sector in view of the current high metal prices of over US$9,200 per tonne.

He said Zambia’s tax revenues from the mining sector currently were expected to rise in tandem with current record-high copper prices which had surged as the London Metal Exchange Copper inventories continued to shrink.

Over US$4 billion Foreign Direct Investments (FDI) poured into mining since 2000 and the vast copper mining sector contributes about 80 per cent of the foreign direct investments and about 9.7 per cent to the total national economic output.

Labels: DETLEF KOTTE, UNCTAD, WINDFALL TAX

posted by MrK @ 9:40 AM