THE Chamber of Mines says it will stand by what it earlier stated that the Mineral Royalty Tax dropped by 12 percent and not the six percent announced by the Zambia Revenue Authority.
Last week, ZRA Commissioner-General Kingsley Chanda said the Chamber of Mines should not alarm the nation by issuing false statements on Mineral Royalty Tax.
But responding to a press query, Chamber president Goodwell Mateyo said the chamber stood by its position.
“I believe the Commissioner-General was referring to a report produced by the Chamber of Mines. The facts and figures you query are contained in the report. The report was meant to be a blue-print for debate, providing a credible plan for recovery of our economy post COVID-19, especially ahead of the budget preparation. We stand by the facts and figures in the report and are willing to engage stakeholders on the contents of our report,” stated Mateyo.
The Chamber of Mines Report stated that the mineral royalty tax revenues were down 12 percent.
“As with the human body, an economy’s ability to withstand the worst effects of COVID-19 is a function both of its prior health – its resilience to external shocks – and the treatment it receives to coax it back to health. As for Zambia, the economy was already in poor health by the end of 2019. This was mainly due to significant increases in external borrowing over recent years, compounded by drought, the electricity crisis as well as a slowdown in mining activity, and thus revenues and foreign exchange. The Ministry of Finance show Real GDP growth at just 1.9% in 2019 compared to 4 percent in 20184. Total debt of $17.4 billion was reported by the Ministry of Finance in 2019, consisting of external debt of $11.2 billion (an estimated 50 percent of GDP) and domestic debt of $6.2 billion (an estimated 25 percent of GDP),” stated the Report.
“With rising debt levels compounded by the depreciation of the Kwacha versus the USD (23 percent in 2019), debt service payments of around $1.4 billion utilised an estimated 40 percent of annual tax revenue collections in 2019. In addition to the high cost of debt, copper (one of the country’s key earners) saw a decrease in production in 2019, following years of continued, albeit muted growth. Despite higher rates of taxation introduced in early 2019, mineral royalty tax revenues were down 12 percent in 2019 compared to 2018, in US Dollars, which are the collection currency. The economic outlook for Zambia in December 2019 was therefore already troubling, and then in early 2020 the COVID-19 pandemic hit.”