A range of industry observers have welcomed the release last week of a new education booklet by the Zambia Chamber of Mines, entitled Taxation and Mining Investment in Zambia.
They describe it as a good initiative which will help to raise awareness of a subject that is of critical importance to the Zambian economy.
Mike Phiri, tax partner at professional services firm KPMG, said: “The booklet is a great initiative, and makes the Chamber of Mines a leader among industry players on disseminating information about their industry.”
He said it should help lead to a better understanding of the link between taxation and mining investment, not just at government and policy level, but also among various stakeholders.
Yusuf Dodia, Chairman of the Private Sector Development Association, said: “It is a good document which was well constructed, and kept short enough for readers to embrace the key messages. It is a good mechanism to initiate a dialogue on the issue of taxation and the development of the mining sector in Zambia.”
On World Bank projections cited in the booklet showing that growth in Zambia’s copper production will start to slow after 2019, Dodia said: “This may be a key departure point which should compel the government to consider mechanisms for diversification away from copper mining towards other sectors such as tourism, agriculture, manufacturing and services.”
Siforiano Banda, Chief Executive of the Extractive Industries Transparency Initiative (EITI), welcomed the booklet and said it would lead to a better understanding of the subject of taxation and mining investment.
“There is not enough knowledge among players,” he said. “There is a need for government and industry stakeholders to always dialogue on matters of policy. If possible, the Ministry of Mines should be giving weekly appraisals to fellow cabinet ministers on developments in the sector, so that they are kept abreast and can assist in redirecting the future of the country.”
Musonda Kabinga, economist at the NGO Action-Aid said it was good of the Chamber of Mines to have released the booklet, as it gives an overview of the mining sector in terms of investment and taxation.
Joseph Chewe, General Secretary of the Mineworkers Union of Zambia (MUZ), said: “The Chamber of Mines has come up with another great publication on taxation and mining investment in Zambia. The first one, on Mineral Royalty Tax, was simple and easy to understand.”
He said it was good of the Chamber to release such “informative and educative” booklets, as they help to close knowledge gaps and inform the Zambian public.
“There is a need for such information-sharing mechanisms to continue so that government and policymakers arrive at policymaking and tax regimes from a well-informed background,” he said.
Msoni Mtwalo, deputy national coordinator for Publish What You Pay, a body which promotes transparency in the extractive sector, said: “The booklet is quite useful in that it gives an overview of the mining sector from the industry’s perspective.”
However, he said it would prove less useful for people outside the sector as it does not break down the implication of the various mining taxes, and doesn’t state the basis on which the royalties cited are calculated.
On the question of whether there was sufficient understanding of the topic at government and policy level, Mtwalo said: “Definitely not – otherwise we would not have had six different tax regimes in the past eight years.”
Taxation and Mining Investment in Zambia is free to the public, and is available in hard copy from the Lusaka office of the Zambia Chamber of Mines. It can also be accessed in electronic form on the Chamber’s educational website www.miningforzambia.com.
Acting Chief Executive Officer
Zambia Chamber of Mines