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What do next year’s changes to the mining tax regime actually mean for Zambians?

Zambia’s financial brains explain why changes to the mining tax regime are positive for the country

Article Credit: Mining for Zambia.

Excepts of the Article; Making Zambia a more attractive destination for investment is the number one shared priority of Zambia’s brightest financial brains. Investment in the country’s mining sector, in particular, has the enormous potential of putting Zambia back on a growth trajectory, with the direct economic benefits from new and expanded mining operations second only to the economic multiplier effects that can support and sustain generations of upwardly mobile Zambians, when the environment is right.

Experts agree: Harnessing the potential of this critical sector requires that Zambia urgently implement global best practices, without losing sight of what is best for the country. Do the 2022 Budget’s proposed changes to mining policy finally put us on track? The country’s leading financial brains weigh in.

Dr Godwin Beene, President of the Zambia Chamber of Mines, called the announcement that mineral royalty taxes will become a deductible expense “a clear indication to the world that Zambia is once again open for business.” 

“The announcement that mineral royalty taxes will become a deductible expense is a clear indication to the world that Zambia is once again open for business.”

How will restructuring MRT rates positively impact the economy? Won’t it simply mean that mines pay lower taxes?

Zambia’s MRT regime is structured around a series of tax bands, with the tax rate climbing to a new percentage point each time copper reaches a different price point. But, unlike the system applied for personal income tax, when the copper price crosses a threshold, the higher tax rate applies to 100% of earnings, rather than just to those above the relevant threshold. It’s equivalent to paying the highest possible tax rate on your entire monthly salary because you earned one or two dollars more than the income band in the tier directly beneath it. 

For the full article, click on the link below

https://miningforzambia.com/next-years-changes-mining-tax-regime-actually-mean-zambians/

 

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