Lusaka (WEDNESDAY, 25th March 2015) – His Excellency Mr. Edgar Chagwa Lungu, President of the Republic of Zambia has directed the Minister of Finance and Minister of Mines and Minerals Development to effect changes to the 2015 Mineral Royalty Tax by 8th April 2015.
In letters to the two ministers today, President Lungu stated that after receiving submissions from individual mining companies and the Chamber of Mines, he has noted that the new tax regime poses a challenge to some mining houses. The President also noted that some mines are high-cost while others are low-cost operations.
“Obviously the mining industry has been affected by copper prices on the international market. It is clear that this unfavourable economic trend globally has been mainly on account of weak global demand for copper,” the Head of State said.
“I wish to take this opportunity to reiterate my government’s resolve to continue putting dialogue at the centre of our governance systems. Dialogue between my government and the mines shall continue.”
The President emphasized that government will always be amenable to progressive ideas that will assist in addressing challenges in the mining sector. The President notes that these challenges cannot be resolved overnight but he is confident that these matters are not insurmountable.
“I have therefore directed the Minister of Finance and the Minister of Mines, Energy and Water Development to review the mining tax regime and make recommendations to Cabinet by 8th April 2015,” the President directed.
Among the options the President has asked the ministers to consider, are the following:
The President also directed that the ministers should also use the current legislation and administrative procedures to ensure that mines that are facing severe challenges are assisted.
The Head of State has meanwhile called on all individuals and corporate citizens to comply with the existing tax laws.
Special Assistant to the President (Press & Public Relations)
Lusaka, Tuesday, 3rdFebruary 2015—His Excellency Mr. Edgar Chagwa Lungu, President of the Republic of Zambiahas directed the Zambia Revenue Authority (ZRA)Commissioner-General Mr. Berlin Msiska to expedite dialogue with mine owners and promptly resolve the impasse over the new mining tax regime.
President Lungu issued the directive after he addressed a special session of Cabinet to consider the impasse over the new mining tax regime and the outstanding VAT refunds for mining companies.
The President said he wants an amicable settlement that must end in a win-win outcome for both the mining companies and the people of Zambia.
On the VAT the status of the VAT refunds, the ZRA Commissioner-General and the Minister of Finance Hon. Alexander Chikwanda reported that a statutory instrument to regulate the payment of refunds would be ready in a matter of days to deal with future payments.
The Head of State has directed that in the light of the existing legal dilemma regarding claims that have already been submitted, new negotiations must therefore be opened to address mechanisms under which any payment would be settled.
“I want to see increased dialogue and increased flow of information that infact we have been talking to the mine owners over these matters. We have to make this clear so that we can forestall the falsehoods that some people are peddling to poison public perception regarding this matter. The ultimate aim is to protect jobs and keep mines profitable at the same time. We must also maintainthe country’s right to collect due taxes,” the President said.
The special session of Cabinet comprised Her Honour the Vice-President Mrs Inonge Wina, Hon. Chikwanda,Minister of Justice Hon. Dr Ngosa Simbyakula and Minister of Commerce Trade & Industry, Hon. Margaret Mwanakatwe. The Minister of Mines will join this committee of ministers tasked to tackle the mines tax impasse. The ZRA Commissioner-General, Secretary to the Treasury Mr Fredson Yamba and Ministry of Finance Permanent Secretary Mr. Felix Nkulukusa were in attendance.
The Minister of Finance emphasised that government was actively engaged in dialogue with the mines and there is therefore no cause for panic and blackmail from any quarters. “This matter is under discussion and I will be addressing the issue at various fora this week when I visit some mines on the Copperbelt this week,” he said.
Meanwhile, President Lungu has reverted Dr. Bwalya Ng’andu to the Bank of Zambia as Deputy Government-Operations. Dr Ng’andu has been on secondment to the civil service as Permanent Secretary for Mchinga Province.
“In January last year, you were reassigned to Government as Permanent Secretary. Just as at Bank of Zambia, you have of Deputy of Governor (Operations). This is a critical position especially at a time when we face intractable challenges in both the domestic and global economies. There is a compelling need to use monetary policy to stimulate the economy and it cannot be business as usual,” the President says in a letter to Dr Ng’andu.
“Our government’s proclaimed intention is to lower the interest rates in order for small businesses to access bank facilities has proved futile because the Central Bank has persistently been tightening even when the economic fundamentals suggested the opposite. It is my sincere hope that you will reinforce the Governor and initiate meaningful dialogue with commercial banks to close some avoidable loopholes that induce injurious outflows of our meagre foreign exchange.”
SPECIAL ASSISTANT TO THE PRESIDENT
(PRESS &PUBLIC RELATIONS)
The Copperbelt Mining Agricultural & Commercial Show will host an exhibition from 27th May to 31st May 2015 under the theme “Maximise Development To Sustain a Strong Economy“.
The Show has been growing each year and CMACS expects an excellent one this year. They already have exhibition stands booked and they are going fast.
It is believed that these shows are an excellent marketplace for a large variety of products from mining to consumers. The show has always drawn a good quantity of quality business visitors during the trade days and large crowds of the general public over the weekend.
The show is renowned for its hospitality and good business facilities. There is a large variety of different sized stands and open spaces to choose from. See the location on this map: https://goo.gl/maps/Y6UUH
We wish to inform stakeholders and Media organisations invited to the Zambia Chamber of Mines briefing on the implications of Zambia Revenue Authority (more…)
Vedanta Resources Plc is gearing up to spend $280 million at its Konkola Copper Mines (KCM) unit in Zambia, a move that will increase production output by more than a third by 2017.
“We have reinvested all of our earnings back into the company. This has supported the creation of 5 000 new construction jobs and in the meantime, salaries at KCM have more than doubled in real terms,” said Vedanta CEO Tom Albanese.
The Konkola mine has made $2.3 billion of capital investments in the past nine years while paying $73 million in dividends. The flagship project provides access to one of the largest high-grade ore-bodies in the world.
The company, which is owned by Indian billionaire Anil Agarwal, also agreed to pay $111 million in debt settlement at the Konkola site, as well as provie a $400 million bank guarantee.
The $280 million investment by Vedanta comes as a bit of a shock. The company and Zambia, Africa’s second-largest copper producer, have a history of bad blood. The situation worsened last month when Agarwal was caught on camera discussing the low price he paid for Konkola and the profit it makes.
Zambia, which once revoked ex-Konkola CEO kishore Kumar’s work permit, is reportedly in the process of revising its mining laws, which could lead to significant future impact on the mining company.
Story by Mining Global.
VEDANTA is in Zambia for the long haul, says company CEO Tom Albanese.
Executives from First Quantum Minerals and Konkola Copper Mines (more…)
Zambia, Africa’s second-biggest copper producer, wants to review mining taxes.
According to finance minister Alexander Chikwanda the move is to help boost government revenue after “inadequate” receipts from the sector last year.
It is only fit and proper that the country gets optimal revenue from its depleting resources
Mining taxes contributed 18.8 percent to government revenue in 2013, Chikwanda told parliament late on Tuesday.
“The contribution of the mining sector is admittedly inadequate”.
“It is only fit and proper that the country gets optimal revenue from its depleting resources. There will be an appropriate and opportune time for parliament to review the existing legislation,” he said.
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