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(LUSAKATIMES) Windfall tax may be re-introduced after cabinet discussions conclude- Bob Sichinga

Windfall tax may be re-introduced after cabinet discussions conclude- Bob Sichinga
TIME PUBLISHED - Monday, November 14, 2011, 5:26 pm

THE windfall tax dreaded by mining companies in Zambia may return after discussions in Cabinet are concluded said Mr Bob Sichinga, the Commerce and Industry Minister when he spoke on Radio Phoenix in an interview yesterday.

Sichinga was responding to calls during the programme-Government and You-aired live on Radio Phoenix saying ways have to be found of bringing back the tax without hurting the mining companies that employ more than 40,000 miners.

“I was a supporter of windfall tax before elections and I am still a supporter of windfall taxes now,” Mr Sichinga said, “we are still looking at that (windfall tax) but at the moment I think we are okey with the increase in mineral royalties from 3 percent to six percent.”

Sichinga also said he wants interest rates presently at an average of 15 percent to come down to 10 percent so that more money can be freed in the economy following the government’s decision to reduce base rates through the Central Bank.

“I feel interest rates must go down to as low as 10 percent,” Sichinga said, “they could reduce even further in my view.”

Mr. Sichinga is the second cabinet minister to indicate that the windfall tax, which has been opposed by foreign mining companies, may return after his colleague Mr Alexander Chikwanda, the Minister of Finance spoke to accountants at hotel Inter-Continental in Lusaka on Friday night.

Zambia wants to raise money to create jobs and reduce poverty according to President Michael Sata whose election campaign was based on “more money” in the pockets.

Earlier, Mr Sichinga said Zambians should not be disappointed with the Patriotic Front (PF)’s decision not to reintroduce the windfall tax in the 2012 national Budget.

Mr Sichinga said the 2012 national Budget is not entirely within the control of the PF because it was swayed by the commitments made by its predecessor, the MMD administration.

“What the minister has said is that he has decided to play it safe by including the mineral royalty taxes, increase and double it from three percent to six percent.

“I believe the mineral royalty taxes will help raise us sufficient money while we examine what else needs to be done with regards to the issues of the windfall tax,” Mr Sichinga said.

He said the PF government will have to honour some of the agreements made by the previous administration because it is the government in power.

Mr Sichinga said by increasing the mineral royalty and not reintroducing the windfall tax means Mr Chikwanda had to do a balancing act.

He said Mr Chikwanda needs time because when the September 20 tripartite elections date was set the country had already past the stage of preparation of the budget and that is why it was not presented in October like it happened in the previous years.

Mr Sichinga said the PF government is tied up significantly by the activities and promises and commitments made the MMD and further changes to the collection of taxes in the mines become necessary after reexamination.

[Zambia Daily Mail]

Labels: ROBERT SICHINGA, WINDFALL TAX

posted by MrK @ 12:14 AM