Friday, March 29, 2024

Windfall tax not good for mining exploration says govt

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Government says the reintroduction of the windfall tax would impact negatively on mining explorations as this would discourage investors from investing in mineral exploration.

Mines and Minerals Development minister Maxwell Mwale has told QFM news in an interview that exploration of mineral deposits is key to keeping the mining industry vibrant because discovery of new minerals will contribute to the sector’s growth.

Mr. Mwale added that there is also need to allow the mines to recover the cost of investments before certain taxes can be introduced.

And the Minister has noted that reports that the Country is not benefiting from the Mines are not true because the Mining firms have been remitting mineral royalties.

Mr. Mwale has clarified that the 3 percent mineral royalty tax is paid at gross production and not on the profits as some quarters of society have been claiming.

There have been increasing calls for government to consider reintroducing the windfall tax on copper following the rise in prices of the commodity at the international market.
[ QFM ]

20 COMMENTS

  1. how come even the investors themselves know they are making a kill but you don’t see it that way. Just a few days ago, Government engaged the World Bank to initiate air surveys for the remaining 42 per cent of the geological mapping of Zambia to ascertain areas with unexplored minerals. How can you trust an institution that is in a big way to blame for the economic downturns the nation faced for years on end? Why is the country failing to stand on its own, are we that incompetent? Why can’t government commit to doing what ought to be done to maximise on benefiting from natural resources instead of forever falling prey to capitalists? Watch the same, soon investors will be asked to bid for the Victorial Falls

  2. KCM’s parent company Vedanta’s revenue in financial year 2006/07 was US$6.5 billion – almost matching Zambia’s entire gross national income of US$7.4 billion in 2006.
    According to KCM’s corporate social responsibility literature, it accounts for one sixth of Zambia’s GDP and one-third of total exports. Secondly, KCM’s ownership was, and continues to be,
    dominated by UK companies – initially Anglo American (whose subsidiary owned 65 per cent of shares from 2000-2002) and subsequently Vedanta Resources, which became the main
    shareholder in 2004. The company now owns 51 per cent of shares and is in negotiation with the other private shareholder – a Bermuda-based company called Zambia Copper Investments
    – to increase its ownership to 79 per cent. The remainder of shares are held by ZCCM-IH

  3. Its amazing how only a small gang of incompetents in govt can claim to be wiser than the collective intelligence and wisdom of the rest of the population.

    The reintroduction of windfall tax calls have not been on mineral exploration but on the massive profits from our already developed & exporting copper mines.

    They are currently making a paltry contribution to the country.

    Please stop fooling the people by intentionally skewing & manipulating facts

  4. If you don’t understand the negative impact of introducing windfall tax, look no further for clarification, ask Mr Sata.

  5. Funny how they are all coming up with rather f00lish,st.upid and absurd reasons why they dont want to re-introduce this windfall tax…they are taking us for f00ls,one day the voice of the people will prevail.You can f00l some people sometimes,but you cant f00l all the people all the time

  6. Mr. Mwale added i quote ‘there is also need to allow the mines to recover the cost of investments before certain taxes can be introduced’. Mr mwale are you on drugs! Had the been making losses they would have pulled out the very first year. TheY broke even way back and they are now minting addict Mwale.

  7. chaps for the w fall tax tell me fact about your beliefs that w fall tax is good for zambian economy. i always thought that the majority of zambians want the w fall tax but my assessment has provide the opposite. so tell us some thing new not just the same old complaints and finger pointing. afterall there may be a slim chance that you could be right

  8. 2 David Frederick Patrick Banda,

    ZCI = Anglo-American = Rothschild
    Anglo-American De Beers = Rothschild

    50.9% of ZCI shares belong to Anglo-American. Anglo-American’s largest shareholder is Rothschild (it used to be the Oppenheimers, but not anymore).

    The ZPA’s website showed how NM Rothschild & Sons actually did the evaluation of ZCCM and sold Konkola Deep Mine to it’s own Anglo-American. Now you can’t even find the ZPA’s website anymore. :/

    NM Rothschild financed Cecil John Rhodes and his BSAC.

    This is what ‘privatisation’ in Southern Africa means. A return to the same owners during colonialism.

    Google: ZCI rothschild
    Google: vedanta rothschild

  9. 8 Global citizaen,

    The Windfall Tax means that the ZRA can actually collect the taxes that are owed to the Zambian people. Right now, they would collect $1.1 billion from the corporate tax on profits and dividend payments. They don’t because they don’t want to and the mining companies are massively evading and hiding their profits.

    They could be collecting 1.2 billion in Windfall Taxes instead.

    The government is still receiving tax revenues, but they are coming mainly from workers as PAYE. The tax burden has shifted from the corporations to the people, as is the rule in neoliberal economics.

    So rather than them collecting fewer taxes, they simply collect taxes from poorer people.

  10. ” And the Minister has noted that reports that the Country is not benefiting from the Mines are not true because the Mining firms have been remitting mineral royalties. ”

    Taxes & dividends owed: $1100 million
    Taxes paid: $50 million

    So what reports are not true, Minister Mwale? Either he is stupid or he thinks we’re stupid.

  11. Rupiah Banda is a very corrupt OLD FELLOW. His defence of not increasing Mineral Royalties tax are not genuine but rather a loss of BRIBES. We shall not continue leaving up to your lies simply because you’re very corrupt.

    Stop wasting our times and go back to your home villages.

  12. #10 MrK your posting is grossly misleading and based on what you read in media not facts. just take me through countries in our region with that w fall tax. look at countries in south america which once had w fall tax and the reason they had second thoughts about.now those will be facts. even many leading economist in zambia or in world think this type of tax is not pro economy. current leading presidential candidates like Mr Sata have never said anything good about w fall tax, why?

  13. 13 Global citizaen,

    Could you be specific about what is ‘grossly misleading’ about what I have said?

    ” just take me through countries in our region with that w fall tax. ”

    Why? What would any other country anywhere have to do with the windfall tax in Zambia?

    It sounds to me that you are looking for excuses not to tax the mines.

  14. An investor calculates envisaged profits and adjusts his operations. As at present Zambia offers plenty of incentives especially in cheap labour and weak laws for him to worry about windfall tax. Even if he was to pay windfall tax that can easily be factored into the expansive investment he has-It certainly would not stop him from expanding. He might even explore for more to offset the tax

  15. i wanted to show you that actually the world has gone away from the w fall tax because its anti business and this is well documented. read about ecuador. it ends up strangulating the economy and progressive countries dont want w fall tax.for example is in our region even when gold had hit its peak about 6 years ago Gold producers didn’t cry for w fall tax to be introduced in their countries.
    secondly i asked you why don’t you think a leading presidential candidate like Sata is not talking about windfall tax despite its presumed popularilty among zambians. my guess is that he is more intelligent than many and understands what this type of tax will do to the economy at large

  16. Global citizaen,

    I’m sorry but what you’re saying about the windfall tax doesn’t hold water.

    I checked up on Equador, and they have a stiff windfall tax of 50%, which they increased to 99%, which caused REFSOL to seek international arbitration.

    In return the Equadoran government offered to reduce the windfall on oil from 99% to 70%, in return for new contracts which stipulate that companies can only find recourse in Equadoran courts.

    Ecuador Oil Min Makes New Offer To Cut Windfall Tax (from istockanalyst /com)

  17. actually facts as presented say they gov and their experts had observed that the economy was being strangulated and the gov on its own reduced to 70%. It was a voluntary act by Ecaudorian gov after assessment of the effect of the tax. please present what you read not insinuations. so my point was exactly what the ecuadorian gov’s assessment about themselves

  18. #17 i have tabulated why i see no sense in the w fall tax. tell me what type evidence can you show that makes you think this tax will be good for the zambian economy. where in the world has it been successful

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