Newly appointed Commerce minister Margaret Mwanakatwe during the Swearing-In-Ceremony at State House on February 3,2015 -Picture by THOMAS NSAMA
Newly appointed Commerce minister Margaret Mwanakatwe during the Swearing-In-Ceremony at State House on February 3,2015 -Picture by THOMAS NSAMA

Zambia’s commerce minister Margaret Mwanakatwe said on Tuesday that payment of mining royalties, which Zambia recently increased, can be deferred until companies have sufficient cash flow if they are not in a position to pay immediately.

Zambia’s government said last year that it would scrap a corporate income tax of 30 percent while increasing mining royalties for companies operating in Africa’s second-largest producer of copper.

Since the tax came into effect this year, however, Zambia’s new president Edgar Lungu has signaled that the country might revise the increase in the face of industry complaints.

“If your company is unable to pay the tax for any reason, we are ready, willing and able to defer your liability. We won’t put away the liability, but we are happy to defer until a point in the future when your cash flows allow you to pay your tax,” Margaret Mwanakatwe told delegates at a mining conference.

The minister defended the new system, saying that only two companies – which she declined to name – had paid the corporate tax in recent years and that Zambia and its people needed to benefit from its resource wealth.

“Only two companies paid corporate tax, the rest paid nothing. Those that paid the corporate tax are now paying a reduced tax. Those that were not paying at all are now paying something. We are bringing about a level playing field.”

Zambia’s Chamber of Mines said in December the new royalties would result in shaft closures and 12,000 jobs losses.

Mopani Copper Mines, owned by Glencore, and Canada’s First Quantum Minerals both have big copper projects that could also be at risk, the Chamber of Mines said.

The minister also said that progress was being made in a simmering row over tax refunds.

Zambia has been withholding the VAT payments from mining companies and other exporters it says have not produced import certificates from destination countries – a step the government says is needed for greater transparency.

The industry says that it is almost impossible to produce such documentation because it sells to multi-national trading houses, and has for months been saying it is owed $600 million.

Mwanakatwe told Reuters on the sidelines of the conference that in fact $800 million had been withheld but $200 million has been given to companies which have produced the documentation.

Meanwhile Vedanta Resources Plc the owners of Konkola Copper Mine (KCM) say they will still go ahead and make tough decisions despite President Edgar Lungu directing the Zambia Revenue Authority to expedite dialogue with mine owners and resolve the impasse over the new mining tax regime.

Vedanta’s Chief Executive Officer Tom Albanese told a mining Conference in South Africa on Monday that tough decisions would still have to be made by his company despite Zambia’s encouraging remarks over the new mineral royalty tax. Mr Albanese said Vedanta through its mining unit KCM is facing a very difficult situation in Zambia.

He said government is chasing capital and the investors away, by making their job a bit harder.The new mining tax regime which came into effect in January, saw mining royalties hiked to 20 percent from 6 percent on open pit mines and 8 percent from 6 percent on underground mines.

Source : Reuters

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49 COMMENTS

    • Just waiting for HH name on the list of thieves at HSBC swiss accounts ,so we can retire him from politics for ever.

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    • PF be serious..who is in charge Kanshi?…old Chikwanda says this; Chikwembe Mwankatwe says that…..this is surely a failed party governing national resources…do you expect any mining company to come to you and announce that they are ready to pay? i dont believe these people are in for a good service to the poor zambians..grow up and be real.

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    • Let them pay! Anil Agarwal has a current networth of $1.6 billion some of it earned from Zambia meanwhile we Zambians are wallowing in poverty and even being nice to them by saying pay later!

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    • ATTENTION

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      Thanks
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  1. What will stop the same companies winding-up after a year without paying any tax and reblanding themselves by operating under a different name later? This is not a good solution at all.

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  2. Thanks Ma’am,
    You are the bestest. You can make it easy for my community to do business in your GREAT country. Nowhere else in Africa do we have such incentiveness.
    We love you deerly.
    Please keep it up.
    Regards.

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  3. So many companies in the past have dodged paying tax by simply coming back under a different name (rebranding).

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  4. PF at work…..yaba…chikwanda is saying something completely different……

    and still no Cabinet…ifintu ni Lungu….Tiye nayo

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    • 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

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  5. Finshi kalelanda aka nako? These guys are ready to pay. Why are you changing now? Chikwanda has already spoken. Do not bring confusion. We need the money now!!

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  6. You Zambians dont listen to these people, they just want to continue stealing our minerals. Where on earth a mining company does not pay tax? And you are saying they can defer, what non sense is this? Please if they want they can go where mines dont pay tax.

    Peace and Prosperity to Mother Zambia.

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  7. Iwe Mangalita, we need money to complete the projects. If we do not we will not win 2016. Wake up. Wilasata sata fye! Where has she come from.?

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  8. Is this trial and error or what? And where is our president, Guy Scott? The man saved the country from looting, only just for a time. Now we shall see looting on a massive and unprecedented scale, never seen before in the history of the republic. The wolves are in control while other wolves lie in wait. Lame duck president does not know what to do. Before we know it another election will be here and we will be told that he did not have enough time, he needs another term. ‘ Zambians made a mistake to vote in Sata, Zambians made a mistake to vote in EL’, no we didn’t, we are a mistake!

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  9. Defer payment until they are paid false documented moneys. How can large corporate businesses fail to avail documentation? What a farcical charade!

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    • It is farcical! It really is! It is fair to say Zambians are shut out of Copper Re ensue benefitting them.

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  10. Dear President Lungu,
    Please remove this ka thing now. She is misleading the nation. There will be no deferring of mine taxes. Do not ewaken our position. We have to collect the money now.

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  11. when is M’eembe going to finish paying his 14 bilion dollar bill he owe ZDB?? Mr. president please give us an update concerning the same ,Fred must pay he is no saint

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  12. The government must not be seen to be backing away from the tax. Stand firm and collect the money. They will pay.

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    • Tebo mwalefya mbuya? Govt by trial and error: where on planet earth have you heard of gov’t deferring tax collection? This is so daft it beggars believe – where did they get this lady from. Why should I pay while others defer: simply put, it is illogical and can’t work!!!

      In any case work & logic don’t go with PF…

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    • Ati differ tax payment, yet they envy the rich governments who make their money through tax collection. It’s so painful how weak our government sounds on tax collection from the so called ‘infesters’ as known by my cousins.

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  13. They should not defer the payment that should be done no excuse. If big mines can defer payment then all Zambians that owe banks and are facing Financial problems should defer until they are all financial stable. She was C.E.O for the bank and she never let people defer due to economical hardships. This ministers should not run the country as if it belongs to them. They should ask us Zambians if we are to agree to those useless terms she wants to bring to the country.

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    • Well done @Baswe Mame

      It’s illogical beyond belief. If indeed every Zambian in financial problems did refuse to pay or deferred their loans where would we go economically.

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  14. The guys have been milking Zambia and defrauding it of the much needed income from tax. The guys are plundering our natural resources and when five years or so comes for them to start paying tax, the guys run away and sell the company to their friends who come in to start negotiations about tax holiday. Enough is enough of this crookedness and rebranding while keeping the Zambians poor while they are dancing and insulting the finger that feeds them like this KCM boss is doing. let them pay or let them just get out of Zambia and we will find competent partners than international crooks and shylocks!!!!!!!!!!!!!!! Go Mwanakatwe Go!!!!!!!!!!!!

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    • @richard

      Concur
      ‘let them pay or let them just get out of Zambia and we will find competent partners than international crooks and shylocks!!!!!!!!!!!!!!! Go Mwanakatwe Go!!!!!!!!!!!!’

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  15. Ba Mwanakatwe Ba Mayo besu….

    Te mu Corporate umu nomba,.. such things tabalipila…

    Just crack the whip!

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  16. Deferrement if not liability extinguishment, it postpones troubles to double them in the future. What the mines are complaining about is the COST, not CASH FLOW per se!

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  17. That is price of being poor. No room to flex your muscle! KK nationalized the mines but we zambians turned them into personal farms so to say

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  18. KIKIKI AWE TWASEBANA NOMBA.Mines should pay the tax.If we they won’t pay then all companies won’t pay.This woman seems to be lost.Anyway katwishi abanakashi ngabafula bwafya saana.Tulimubwafya ba PF.Please lungu bring back abaume before it’s too late

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  19. The way ZRA pester Zambians on prompt tax payments, awee surefye! What is so special about the mines? Let’s run the mines, we have enough trained personnel, enough institutions in place, we understand the logic, theories and all necessary tenets behind mining. We’re not in the Welensky era!All we need is financial backing. And off we go!

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  20. Don’t start back tracking they are . These companies should pay what is due to the Zambian people. They can not play the games they are playing if they were based in industries countries or SA.

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  21. Zambia and African nations should not budge on this one. Add value to the minerals and build more infustructure, we are better of dealing with China than India. Your friends enemy in this case is your best friend. China is a larger hungry stable economy. Zambia and Africa just need to wake up.

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    • Agree with you! Mess started some 20years ago! Ufortunately our technocrats are on the side of the mines. These include Bantubonse, Emanuel Mutati, Milupi and others

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  22. Issues of taxation are the preserve of the Minster of Finance, so the madam should not comment on matters that do not concern her ministry more especially that she is new in Government. So far only the Minister of Finance has powers and final say on matters of taxation.

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  23. Zakeyo, we appreciate your view, however, in the event that the mines shuts down or down sizes human resource, it is the commerce and labour Ministers issue. Finance deals with fiscal policy, the implementers.

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    • Precisely that is my view the fact that the budget has been approved by parliament she has no authority to suggest otherwise. Ministry of Finance has to implement what has been mandated to them that is to collect revenue thru’ ZRA

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  24. Oh dear I hope she was misquoted! What was the Commerce Minister doing at a mining Indaba!

    She needs to be schooled, government is different from companies in the private sector. This is a serious slip!!!!!

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  25. is this the same lady that messed up barclays bank zambia, selling off all nice branches and ending up openning makeship one later on? i cant trust her.

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  26. We like Hon Mwanakatwe’s plan
    It will make business easier for members of my community.
    The best minister of commerce ever.
    Thanks ma’am.

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