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.