The current tax regime for the mining sector is making Zambia unattractive to potential investors when put alongside other copper mining countries, First Quantum Minerals (FQM) has said.
Other copper mining countries include; Chile, the Democratic Republic of Congo, and Tanzania.
FQM Head of Government Affairs, Mr John Gladstone, said Zambian mining firms were this year facing the highest copper mining tax regime globally which could challenge economic viability of some of the country’s existing mining operations.
The current mining tax regime, Mr Gladstone said, possessed a range of difficulties to the sector thereby making it unattractive to potential investors compared to other copper mining countries.
Mr Gladstone observed that the mining tax measures introduced this year would not incentivise growth in the sector and would not increase Government revenue either.
He was speaking during a panel discussion on “establishing mutually beneficial fiscal regimes” at the just ended Zambian International Mining and Energy Conference and Exhibition (ZIMEC). The conference was held under the theme “Creating an attractive investment framework to catalyse Zambia’s mining and energy sectors.”
“It is really a difficult environment to do business currently. The mining tax measures introduced this year won’t incentivise growth in the sector and nor will they increase government revenues. It is a difficult thing to get it right but through constant dialogue and wide consultation I am confident Zambia can get it right,” Mr Gladstone said.
He emphasized the need for Zambia to have a competitive and stable tax regime in order to attract new foreign investors while promoting existing investments in the mining sector.
Mr Gladstone said government and the private sector should seek to create a framework in which a modern, progressive, developing commodity-based economy could be built.
Mr Gladstone said this was a scenario where investors vied to invest in Zambia. “Zambia is hugely rich in natural resources. Zambians deserve to benefit from those resources and the way to that is to attract foreign direct investment (FDI). With the right tax regime FDI will come, but Zambia must compete against other jurisdictions,” he said.
And Zambia Chamber of Mines president, Mr Goodwell Mateyo, requested Government to revisit the current tax regime for the sector as it is served to deter investment. Mr Mateyo complained that the industry had been faced with a mining tax regime that left the sector an outlier with higher tax rates compared to peer mining jurisdictions.
By Daily Nation