The $400 million the government seeks to earn via a new windfall tax from copper exports this year will not benefit miners unless the government slashes the 35 percent personal income tax, unions said on Monday.
The Mine Workers Union of Zambia (MuZ) and National Union of Mining and Allied Workers (Numaw) said the proposed tax would not directly benefit the workers because the funds would be spent on national projects.
President Levy Mwanawasa said on Friday that Zambia would introduce a mining tax in 2008 that should earn $400 million in revenue and effectively increase mining taxes to 47 percent from 31.7 percent.
Head of the MuZ Rayford Mbulu said his union would propose a cut in the 35 percent personal income tax miners in the copper and cobalt mines pay because the funds to be raised from windfall mining tax would cover loss of revenue by the Treasury.
“We now want the government to reduce personal income tax which is 35 percent of gross pay, including allowances so that the workers can benefit directly from the money the government will raise. The government should cushion the impact of high tax,” Mbulu told Reuters.
Numaw general secretary Albert Mando said miners were going to benefit only if the bulk of the revenue the government would collect was spent on improving facilities in mining areas.
“We pay too much tax as people who produce the copper and we require some kind of cushion on tax, we want the government to address this in the budget this year. We would be glad if most of the money was spent on improving mine townships,” Mando added.
Mbulu said the workers were “paying too much” in personal income tax while the owners of the Zambia’s vast copper and cobalt mines paid less tax to the Treasury.
Government data shows that Zambia in 2007 collected $142 million in mineral royalty and company tax from earnings of $4.7 billion in copper and cobalt exports by foreign owners of the copper and cobalt mines, which employ over 50,000 workers.
The government has been pressured by unions over the past few years to spread the gains of its copper wealth to workers in the vital industry, the backbone of Zambia’s economy.
Mwanawasa said the hike in taxes sought to address those concerns as the government planned to spend the additional resources on sectors such as education and health.
Goverment should start working on the logistics of broadening the tax base. Only a handful of people in Zambia Pay tax which explain why PAYE is so high. There is no a way a single worker can be remitting 35% tax. This is exploitative and should be revisted if the Zed miners are to benefit from the booming Cu/Co prices At the LME.
#1 Cut the rubbish about the same old song. ALL Zambians pay Tax about 17.5% and it is called VAT in case you did not know. Yes the workers are over taxed, but the answer is not more taxes. Cut Govt size. Chuchu called an Indaba and they advised him that he cuts govt size and he has not done so todate. So this broaden tax base song should end. Even my grandmother pays tax on every little things she buys-17.5% for somebody who does not work. How much more does this Govt need. They have enough.
#2 Chocha I think you are one of those disgrantled fools who dont understand the basic principles of economics. Your grand mother buys Katapa from the market and you think she is paying vat. Did you recently graduate from mick mouse college behind kalingalinga? Number one is entitled to his own opinion and you should site yours too. Do you understand how much 35% paye translate into for a poor Zambian worker. You better keep your stinking mouth shut.
#2 Ba Chocha, I am sorry Iam not a type who believe in exchanging isults on the Blog.
Hi Mwinepabo, I did not mean to insult you. Am refering to this idea of broaden tax base while our leaders spend lavishly on all sorts of things. As to #3. My grandma does not live on Kapenta alone, she pays Zesco bills, Water bills, gets on buses, buys sweets for her grandkids and even has a cell phone and pays talk time. All this expenditure has a trickle down of 17.5 % to the govt cofers. If you call that micky mouse economics, well do us a favour and ask your govt Harvard economists drop VAT
Point is 35% is too high to stimulate saving and investment in Zambia.Lets discuss issues here, vat I can understand, its broad coz caters for goods and services.But, gents the govt has already got a windfall from the new tax system for mining.Can’t they reduce the tax burden our pipo have.And point of note, that union leader want govt to spend the money in the C/Belt, is soo shallow, a clinic in chinsali is better than a public pool in kitwe.
Is Sata aware that his friend Chen Shuibian of the Chinese renegate province of Taiwan lost parliamentary elections last week and has since resigned as party president and is out of power by March/ Now we’ll see who will be oiling the dirty palms of Satanyoko at a time when his bwato is also sinking fast. AWE SUWA, THIS IS AGONY!
#2 Don’t expose your foolishness, 17.5% is a common tax for everybody – employed or unemployed but PAYE only folks in formal employment are heavily tax. What we are saying is let the tax man start axying your Kantemba and then yuo feel what is means to 35% of your earning, loafer!!
#2 Don’t expose your foolishness, 17.5% is a common tax for everybody – employed or unemployed but PAYE only folks in formal employment are heavily tax. What we are saying is let the tax man start axying your Kantemba and then you feel what it means to be robbed fo 35% of your earning, loafer!!
#7 Uleichindika, ndekulowa ukunya!
Phew! I was really worried about Zambians’ business acumen:
We have not engaged a foreign firm’
KANSANSHI Mine in Solwezi says it has not engaged a foreign company to provide cleaning services following the termination of contracts for local companies which were providing the services.The mine’s management said in a statement issued in Lusaka yesterday that the company engaged to carry out cleaning services was a Zambian registered firm and had been operating in the country since 1995.
invited tenders from Zambian registered and incorporated companies,” the statement reads.
Kansanshi denied having advertised the tender outside Zambia and said the process adopted conformed to both the letter and spirit of the development agreement between the mining company and Government.
“The new contractor has taken over the work previously done by the two contractors at half the price.
and Social Security, Ronald Mukuma, for the mine to rescind its decision to terminate contracts for local companies that were providing cleaning services.
The management said the new cleaning company engaged also provided services to the National Airports Corporation (NAC) and 99 per cent of its workforce was Zambian.
“The new contractor has also re-hired all qualified Zambians previously employed by the former contractor.
The new contractor was identified after a bidding process that
invited tenders from Zambian registered and incorporated companies,”
Kansanshi denied having advertised the tender outside Zambia and said the process adopted conformed to both the letter and spirit of the development agreement between the mining company and Government.
“The new contractor has taken over the work previously done by the two contractors at half the price.
Correction
When is the budget presentation?
Mineral royalties earnings are much more than taxing the net profits. Besides, companies have for years been using creative accountancy to reduce their net profits. This entails that the money they remit in taxes will still be low.
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