The Government has maintained that pressure to force it to impose higher taxes on mining companies is unrealistic because the Zambian law on taxation is a replica of the laws in developed countries such as Canada and Australia.
Finance and National Planning Minister Situmbeko Musokotwane has also maintained that the Government’s decision to privatise the mining companies is irreversible because the current poverty levels and under-development in the mining hubs had resulted from the mistakes made in the 1970s when the mining companies were nationalised.
Speaking during a recording of the British Broadcasting Corporation (BBC) television debate at Mulungushi International Conference Centre in Lusaka yesterday, Dr Musokotwane said African countries were encouraged to nationalise for them to become rich but the opposite was true.
He said the mining companies had matured and were able to pay more taxes that had helped the Government raise more money for various development projects.
He said the windfall tax being agitated for would make Zambia less attractive to foreign investors and lead to massive job losses.
Apart from Dr Musokotwane, the debate featured former British secretary of state for international development, Claire Short, Andrew de Simeone from the Brazilian mining giant Vale, and Mopani Copper Mines chief executive officer Emmanuel Mutati, and was moderated by BBC broadcaster Tihabi Redi.
Ms Short said Africa’s wealth had become a curse instead of it being a tool for poverty reduction, but Dr Musokotwane opposed the view and said minerals had done a lot for Zambia by creating jobs while the money from taxes was being used for poverty reduction.
He said the value of mining declined because of the poor management of the companies, especially when they were nationalised, but that the fortunes had changed drastically.
Dr Musokotwane said the law guiding the mining systems in Zambia was similar to the one obtaining in countries like Canada, Australia, and South Africa and that it was wrong to demand that Zambia should have a special tax that was not applying to other mineral-producing countries.
[ Times of Zambia ]