9.5 C
Alba Iulia
Sunday, September 26, 2021

We are not opposed to windfall tax-Chamber of Mines

Economy We are not opposed to windfall tax-Chamber of Mines

luanshya copper mines (LCM)
luanshya copper mines (LCM)

The Chamber of Mines has clarified that it is not opposed to the reintroduction of the controversial mining windfall tax.
Chamber of Mines President Emmanuel Mutati explained that the mining industry in Zambia is only opposed to the manner in which the windfall tax was applied.

Mr. Mutati said it was ridiculous for the MMD government under late President Levy Mwanawasa to introduce windfall tax which targeted gross revenue.

He said the mining industry would welcome a windfall tax as long as it is targeting profits on a sliding scale.
“What we keep saying is that we are not opposed to this windfall tax. We welcome any higher taxation measures as long as there is consultation across the industry,” he said.

“In 2006, the late Mwanawasa invited us to Livingstone for the ZIBAC Conference and he told us he wanted to bring windfall tax, as the Chamber, we said we won’t have a problem with such a tax as long as it targets profits. What did we see in the end? He went ahead and brought a windfall tax based on gross revenue and we opposed it.”

Mr Mutati said only Zambia and Mongolia had a windfall tax which was structured and administered in such a way.

“Every other country with the kind of natural resource we have here does not go for the actual profits but gross revenue. Our argument has always been that gross revenue does not represent the actual profit of any investment especially that mining is a late maturity investment vehicle,” he said.

He added, “Our position has not changed since. Every today, we would welcome a windfall tax as long as there is wide consultation and is based on profits.”

Zambia first introduced a mining windfall tax at the height of the high metal prices in 2007 under late President Mwanawasa and raised close to 300 million US dollars in one fiscal year.

The windfall tax was later scrapped off by the Rupiah Banda administration after intense industry pressure.
There are now renewed calls to have the windfall tax reintroduced especially that President Michael Sata was a key campaigner for higher mineral taxes when in opposition.

9 COMMENTS

  1. Good to learn that you are not opposed to windfall tax. Now the govt can reintroduce it without you raising hullabaloo about it. It is imperative to levy it on gross revenue because there is a tendency by mining companies and business houses to declare losses or doctored trading results. GROSS REVENUE IT SHALL BE!

    • Read between the lines; he knows that when we introduce windfall on profits his members will never declare profits and ZRA neither has the resources or the manpower to investigate such issues.
      Levy was savvy enough to pre-empt this! !

  2. Please Mr . Mutati don’t mislead people. it easy to administer windfall tax when it is based on gross revenue than on actual profit. the reason is that profits are subject to a lot of manipulation. there are mines in Zambia that were declaring losses even when Copper prices were at $9,000.00/Ton.
    On the other hand, its easy to collect windfall tax based on gross revenue because government will easily collect data on how much copper each mine is exporting because these exports pass through out boarders and can easily be tracked by ZRA. In addition, copper price are always availed on the London Metal Exchange (LME).
    Therefore : Windfall Tax payable = (proposed % of tax) (Tonnage Exported x Copper price at LME)

    • Spot on but he won’t get into those specifics as it would be an own goal. He is merely reading what his puppet masters have put in front of him even if it mesns depriving his great grand children what belongs to them.

  3. And you think these miners will ever record a profit. .they will forever record losses as they will only sell the copper to their subsidiaries companies at discounted prices. This puppet of a man is a danger to every Zambian.

  4. When companies borrow money from banks and they agree on a repayment schedule they dont wait until they make profit the pay as amatter of obligation. Equally the owner of a resource have no business with the profitability of the business especially if it determined by the company itself. When the mines took over the mines their hope was that the price remain above $2300/tonne and all their cash projections were based on that figure, now that the prices are are way beyond $6500 there is a windfall income and must be shared between the company and the owner of the resource. after all which is more important capital resource or the Natural Resource. The chamber of mines is irrelevant to the zambian people and are totally useless and foolish

    • The Chamber of Mines of Zambia is registered as an association for mining employers, be they large mining companies or single employers so take everything they say with a pinch of salt as they only serve the interests of its members (big business) and certainly not us.

  5. The thinking capacity of some Zambian Engineers are so pathetic that it leaves many like me wondering whether they have been to a University of good standing. How do you apply windfall tax on a sliding scale when you are dealing with screwed and crooked investors? Please use your brains. MMD members of parliament must be last persons to propose on this issue. They are *****s – *****s took the clock backwards not so long ago. MMD is full of lies and rubbish brains.

Comments are closed.

- Advertisement -

Latest News

Winless Power Dynamos Lose Fourth Straight Game

Power Dynamos have remained bottom of the FAZ Super Division with no points after losing their fourth consecutive match...

More Articles In This Category

- Advertisement -