Zambia’s cabinet on Monday said it had ratified suggestions to place the southern African country’s royalty tax rate for open cast and underground mining at 9 percent.
The government of Zambia, which is Africa’s second-biggest copper producer, has also decided to price corporate income tax on mining operations at 30 percent, according to Reuters, Mineral managing will cost a tax of 35 percent when the law takes effect on July 1, Reuters added.
Last week, in a bid to put to an end a protracted impasse with Zambia’s mining firms, the country’s cabinet ministers had agreed to shelve a proposal for an increase in royalties demanded from mining firms.
Edgar Lungu, the newly-elected President of Zambia, had called on a set of ministers to conclude certain parts of the proposed adjustments before they are presented for parliamentary endorsement in the week ahead, Amos Chanda, the presidential spokesman told the Wall Street Journal (WSJ) on Tuesday.[pro_ad_display_adzone id=”10″]
The latest move brings to an end a prolonged squabbling between mining firms and the Zambian government over the new tax system meant for mining firms. It is also the most important respite to the mining firms that have been battling to deal with the ever-increasing capital outlays along with international metal prices. “The President hopes that the changes will promptly eliminate market anxieties in the mining sector and forestall any potential instability,” Chanda told WSJ.
In October last year, Zambia proclaimed a brand new mining tax system that required open-pit mines to fork-out about 20 percent royalty on their profits. This had surged from 6 percent. The new tax system worried investors, forcing firms like resources firms, Glencore and First Quantum Minerals to cancel expansion projects valued at $1.5 billion.(VENTURES AFRICA )