ACTING President Guy Scott has assented the the Mines and Mineral Development Act into law together with Zambia Revenue Authority (ZRA) Act, Value Added Tax (VAT), Customs and Excise, Property Transfer Tax, Income Tax and the Local Government Act.
These bills, which will come into operation on January 1, were assented to on December 23 this year after they were enacted by parliament and authenticated by Speaker of the National Assembly Patrick Matibini.
According to documents obtained yesterday, Dr Scott has assented to the amendment of the Mines and Minerals Development Act 2008 which provides that a holder of a large-scale mining licence, large scale gemstone licence, small scale mining licence, small-scale gemstone licence or an artisan’s mining right shall pay a mineral royalty at the rate of 20 percent for opencast mining operations and eight percent for underground mining operations.
The Mines and Minerals Development Amendment Act 2014 shall be read as one with the Mines and Minerals Development Act 2008, referred to as the principal Act.
The amended Act provides that mineral royalty payable on industrial minerals shall be at six per cent of the gross value of the minerals produced or recoverable under the licence.
The amendment Act also provides that a person who is not a holder of a mining right or licence who extracts minerals or is in possession of minerals extracted in the republic is liable to pay mineral royalty.
The rate will be six percent of the gross value for industrial minerals and 20 percent of the norm or gross value for other minerals.
Meanwhile, subsection four says that where the commissioner-general determines that the realised price does not correspond to the price that would have been paid for the minerals if they had been sold on similar terms in a transaction at arm’s length, between a willing seller and a willing buyer; the commissioner-general may give a notice to that effect to the licensee and the amount of the gross value shall be determined in accordance with the mechanism contained in sections A to 97 D of the Income Tax Act.
And the ZRA Act has also been amended and is now cited as the Zambia Revenue Authority (Amendment) Act 2014, and shall be read as one with the Zambia Revenue Act, referred to as the principal Act.
The principal Act is amended by the insertion immediately after section five.
Section 5 (A) says that notwithstanding anything to the contrary contained in any written law, where a judgment or court order is obtained against the Authority, no execution, attachment or process of any nature shall be issued against the Authority or against any of its property.
It further reads that the Minister or the commissioner-general shall cause to be paid out of the general revenue of the republic or revenue of the authority such amounts of money as may, by judgment or court order, be awarded against the ZRA to the person entitled to the money.
The principal VAT Act is amended by the repeal and replacement of Sections 15.
Way forward, but why now Mr President??
It’s never too late papa. It’s better done than never.
Bravo Pf government.God is on your side PF
Any form of blackmail must not be tolerated. Bravo Government, Bravo Parliament and Bravo Dr. Guy Scott.
If this in response to “Transfer Pricing” in layman terms – day light robbery of the so called mining investors of the Zambian people then it’s still not enough.
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This is long overdue.. We remember when Levy P introduced the windfall tax, the same mines threatened to leave… eventually no one left. The truth of the matter is the investments they have made are huge and it will be business folly to leave it all behind, besides they know that the Chinese and Zambian government will simply take over operations. Capitalism does not grow a developing country, this is what History tells us over and over again. For now Social capitalism is the way.
I have no qualms on making mines pay more tax but can somebody please explain the new ZRA act.Does it mean ZRA can not be held accountable in courts of law? Laws should be written in plain english so that everyone understands.This thing of copying old Colonial language just doesn’t cut it!!!Or perhaps laws should be translated into local languages so we can all understand.
Guy Scott is the future; black people cannot run a country; give us your companies; we shall hire u; pay u peanuts and make a killing of a profit when exporting minerals…white people rock : )
@1.5 – Haleisa
While this is a very welcome step and well overdue, we should not take a view, as you are suggesting, that;
“The truth of the matter is the investments they have made are huge and it will be business folly to leave it all behind, besides they know that the Chinese and Zambian government will simply take over operations.”
It will work against the free economy market and less investors will see Zambia as an investiment destination. We should work from the premise of “fair returns” and a “win, win” situation for all. The investors should be allowed to make money because that is the only reason they came but that should not be to the extent of cheating Zambians all the way.
Thumbs up to the Govt and now we need Zambian participation in “real business” opportunities.
People please question things where necessary but not everything..
GBM, you are late, no position for you in my party.
We regret to inform you that all ministerial positions in my party are fully occupied.
No obesity in my party.
Thank you for supporting the winning team at last hour.
Yours Faithfully,
UPND
@its a worry? There is nothing like a ‘free economy’ on planet earth. There is always the invisible hand. A countries economy in its infacy stage needs all the government involvement it can get. The reason is simple. Its only the government that has the ability to atleast try to spread the gains equitably amongst th population. A capatalist does not have time for that, if anything he will prefer not to pay any tax at all. This model is what caused China to progress rapidly since the 1970’s. Even the most prized capitalist states were social capitalist states during infacy. Government is able to build and invest in areas of the least return and later on start withdrawing to leave for the capitalists to take advantage and eventualy a state becomes capitalist..its a cycle
Great move, Mr. President … especially that the Mines and Minerals Development Act 2008 and 2014 as revised will work in conjuction with the Zambia Revenue Act 2014 while empowering the Minister and/or the Commissioner General to handle audits so as to catch transfer pricing.
What I see missing are punitive measures levied against erring parties unless of course these are recorded elsewhere and not just reported in this article. This is crucial because if the price of being caught cheating is less than the actual tax, crooked investors would choose the earlier.
Otherwise, kudos to you and parliament for taking the move. This means more money for more developmental projects aimed at improving the quality of life for the smart people of the Zambian Enterprise … I like what I see!!
that’s the way to go. those against it should park and let others come on board it has been too much of been cheated by these investors.
Nice one Guy Scott. You’ve done well. I just like this man Scott. Very patriotic Zambian. Just wish he was eligible to stand as president. Useless names like Lungu wouldn’t even be mentioned in Zambian politics.
satana
lungu told him to sign
VIVA LUNGU
Just thank him dont use your thanks as a means to insult innocent people, EL is not ruling, Guy is ruling eh!
Please help! What are industrial minerals. Doesn’t it include copper. if so then this law has been passed to hoodwink Zambians.
These international investors are a scam,
Kagem Mining ltd in kitwe have been scamming the government since 2002; In every emerald auction held by the mine, the high quality stones are put aside and sold under the table to Indian buyers from the city of jaipur and the sale is not recorded; even when the company is having an auction outside Zambia, only 3.5 million dollars of emerald sales are recorded and taxed while another 7 million dollars worth of product is smuggled out of zambia illegally and the sales of these emeralds are not taxed or recorded in their books of accounts;
ask the directors responsible, Mr Govind Gupta and Mr Lewanika; all these illegal sales of stones have been going into their pokets
Ba eshu:
Copper is usually not considered an industrial mineral because it can easily be refined and utilized as a direct raw material for things like electronics, bullets, piping, etc.
However, rock or minerals such as limestone, gypsum, clay, sand, barite or talc which can be used for cement, construction, plastics, ceramics, paint and other industrial applications are considered as industrial mineral.
There’s a thin line between what is organic and mineral when it comes to such applications but that’s beyond my pay grade, I am sure there are others more qualified to detail that for you than myself.
Having said that, Zambia is very rich in industrial minerals but the reason you hear about copper and not them is due to lack of a proper industrial base. I want my Zambia…
Oh yeah, we need more money to accelerate our development efforts, we still have power stations, roads and bridges, universities, schools and hospitals to build.
The mines should state their case for opposing this. We do know about the reports of how the owners of these mines live luxuriously in Switzerland and elsewhere.
Let it be a win-win situation
Good move but still…if you give more cash to an unresourceful,clueless folks with no business acumen or discipline ,they’ll still be poorer.
Getting ahead is not all about $$$, its more about ideas,resourcefulness,focus and discipline -and money doesn’t buy you that set of attributes.
“..Dr Mphande said Zambia is the only copper producing country which collects low mining taxes averaging between US$2 billion and US$3 billion annually which he said is unacceptable. …..he said despite paying lower taxes, mining companies are earning between US$8 billion and US$12 billion per year….”.
If the learned Doctor’s/Chief’s figures are correct, by my calculations, 2/8 or 3/12 =25% tax paid. Add Labour costs, material inputs, and other production expenses, repayment of loans with interest, recovery of exploration costs, mine development costs which can be estimated at 60%. Total costs: 25%+60%=85%. Profit=15%. ……..Continued
Already we read how mining investments in sub-Saharan Africa have recorded a sharp down-turn for various reasons including the above, plus political uncertainty, long term policy uncertainty, labour unrest, skills shortages etc etc.
The sober questions that we should ask ourselves are:
i. Is 15% a decent or indecent profit for such high risky investments?
ii. Will an investor come to Zambia if he can make a better profit in other competing investment (mining) destinations?
iii. Or is he at the point where his money is safer and more profitable if invested in US Treasury bonds than Zambia’s Lumwana Mine for example?
its fine ba Sober. They can keep their investment and we preserve our minerals. when our competitors exhaust their orebodies we shall earn more baks. They wont go anywhere baane.
@Sober economist: What a rogue, foolish and misguided economist you actually are – Ar.sewhore!!
Do you really think that Zambians are that foolish for them to believe your fake figures? You stu.pid numbskull need hanging. Why dont you put that **** in your Ar.se and some of it Barrick Gold’s Ar.se too.
1. Tell us how you got 60% – that is where your nonsese is? You just made it and expect us just to accept your STUPIDITY?
2. What is your understanding of Earnings? Did you go to Matero University or a proper University?
3. How did you deal with Transfer Pricing in your model. Argawal, Action Aid and even Zambia Sugar tell us that this is rampant.
4. To hell with you**** and investors – go back where ever you came from. Put it simply, Just F** OFF!!
bla bla bla.Let them stay away if the so want.
Tell them to take that dishonest -slavery investment to the US coz Obama will allow them stealing at will. Its better our copper remains in the soil as it will continue increasing in value. Amen.
what is the return on treasury bonds? Most of the bonds have very low returns but then again the risks of loss of your investment are also low. I don’t think you get a return of more than 5% on most of the bonds.
@One Hit Wonder!
Do you even understand what transfer pricing isLooking at hh’s crew, I don’t think this country will benefit from its minerals in any way if we voted for those guys.
Most of them are selfish business men keen to make profits regardless of what it costs the country. Unless you are one of them and will benefit if HH wins, I don’t see any good reason for you to follow blindly.
@Njeu, your question is synonymous to asking you whether you know your own name. I find your question obnoxious but I will answer it anyway. Do you think I can bring up a topic that I don’t understand and write a whole page about it? Can I point you to the LT story ” HH promises to reduce electricity tariffs” before it goes into archives. Review postings 7.0 to 7.9 where I have covered transfer pricing. I have also asked you to watch “Stealing Africa – why poverty?” where transfer pricing is explained and how it has crippled our country. So what was your question again? Do I know something that I have just told you about? Use this blog for enlightenment and not attacking bloggers who are contributing to bring awareness to the general Zambian public. That said, I forgive you.
Thank you Alexander Chikwanda!
Well done Mr President
Long overdue
At last, Zambia can benefit from her “god-given” resources
Please read Helen Zulu’s article in the Sunday Times of about 18 months ago. A London-based mining consultant advocated this. Allafrica.com is still syndicating her article.
good move but too late to win the 20 jan presidential elections. i wonder how many overdue laws guy scott will sign in the next 23 days!!!!!!! elections are good because they compel politicians to deliver at whatever cost on their empty promises
It has nothing to do with the elections. The budget was prepared way before the death of president Sata and approved by parliament just over two weeks ago, how else did you want it to become law?
Reading is a good idea you can learn a thing or two. For a start, start following parliament proceedings, it will do you a lot of good in matters of this nature.
Good. This is long overdue. In fact it is so long overdue that citizens are justified when they get suspicious and ask ‘WHY NOW? Why have you taken so long? What’s the real motive in this now?’ As the saying goes:- The devil is in the detail.
@Cactus:
Better late than never. Without change of Govt in 2011 and if it was left to RB, this would NEVER have happened.
Nyamasoya, is the man who scrapped Windfall Tax without thinking and deprived us of our benefits from our resources!
It takes a bold white man, Guy Scott to do the right thing – Africans dont know a thing about running the economy.
@Chilyata, you are a very prejudiced person indeed. The colour of the skin has NOTHING to do with this. This is no time for racism, especially against your own kith and kin. Learn to debate maturely.
Scott is now doing like a headless chicken
chilanyonga….you can collect maximum tax from mines but the useage of collected tax is pathetic.all the tax paids goes into pockets of foolish politicians.
….if only we had 10 or more of the Guy Scott type of managers in our midst, zambia could have been heaven on earth indeed. It may not be too late bloggers, the beautiful ones are not born just yet. Viva Zambia, viva “Muzungu ochenjera”….
Bad for pf in the short run. Good for Zambia in the long run
Well done Guy Scott.
NEXT TO BE SIGNED IS RECOGNITION OF CHITIMUKULU WHICH WILL BE DELIVERED TODAY AFTER PRESSURE FROM GBM AND HHHH
LUO YDAY WAS FORCED BY THE EDGAR LUNGU TEAM TO GAZETTE HIM BUT BEMBAZ HAVE DECIDED WHO TO VOTE FOR AND SORRY ITS NOT PF PF
Well done ba Guy look at the consumer and protection act again
UNDER PRESSURE UNDER PRESSURE NO CHIEF CHEWE LUO WANYA BUT ITS HHHHHHHHHHHHHHHHHHHH
NOW EMMANUEL MWAMBA JEALOUSY HAS STARTED ATTACKING THE BRILLIANT BEST INTERVIEWER IN ZAMBIA THE ONE AND ONLY
COSTA MWANSA
COSTA MWANSA YOUNG MAN YOU ARE JUST TOO INTELLIGENT NOT THESE BASTARDS KANDILEZI JOBSEEKERS
Scott is preying on the gullibility of power Zambian people moreover on the ignorant citizenry that lacks an understanding of global economics.
Let Chiluba to play the nationalist card on the sale of the mines. He ended up antagonising the global mining syndicate and was locked out. You are aware of the Roan Antelope Mines?
Scott does not mean well for the country. The process of wooing investors in a country
has beome exceedingly competitive. You ought to package your offer in a way that you guarantee a well defined exist plan that has no risk exposure.
In short, people like Scot should appreciate that in modern day markets were there’s aggressive and cut throat competition a country needs investors and not the other way round.
For once Sir you have acted in the best interest of Zambia. Ba Scot this the way.
In attempting to sabotage the Lungu Presidency to two years. Scott is proving to be a mole for the threatened cartel and useful *****s.
Reading Mmembe’s lamentations once again proved the fact that they do not mean well for Lungu and company which as also prove be elusive, placing them to be many steps ahead of the outdated and out of touch cartel.
Mmembe in his editorial is misinforming people by the virtue of Lungu being the party President it places him to be Scott’s boss. A decision made by Scott has to in harmony with the party whose President is Lungu. Scott is the act republican President on behalf of the ruling party and not in isolate and can not detach himself because he’s not an island as wrongly suggested.
Well done PF!let these mines pay our Govnt well because we’ve lost a lot of money and now its the time these mine firms paid proper taxes!Bravo PF!
It is indeed the way forward; however, Zambians must be forewarned not to put in Statehouse misplaced politicians of the belly who can do policy reversals at the stroke of a finger like what took place during Rupia regime for the wndfall tax that was implemented by Levy.
@8.2 Chilyata, I do not debate with insults, but I respect that your upbringing may be different from mine.
Coming back to the topic, here is some food for thought: this is election time right? PF will do anything to give gullible people what they want to hear, for the vote. In 2011 the major campaign messages by PF included re-introduction of WINDFALL TAX, chasing away the Chinese, new constitution, Barotseland, ZESCO load shedding etc. They had a customized message for every possible voter. When they attained power, did they re-introduce WINDFALL TAX? NO!
This time PF has exactly the same message but delivered differently. Be assured that come 21st January 2015, PF will revoke this new tax law, never mind what they do or say in public.
To be fair I think this change was tabled before MCS passed away, before the election was required, so your argument is completely invalid. Perhaps you can reveal how HH is going to defeat the global practice of transfer pricing
It’s not more tax ba LT. It is a different regime. These are royalties so it’s up to how much they have dug out of our sand our soil our land our minerals!
One day Africa and Zambia included will be free from colonialism and great manipulation. The rise of China will set balance of power around the world , thus Africans will have muscle to negotiate their way out shackles of domination . Thank you , my PF – you are the party to reckon with .
Very good decision taken by PF government to bring mine tax up. But let us see the good use of that money for infra structure development. Roads, healthcare services, education and please agriculture. not just shopping malls.