President Edgar Lungu has directed Finance Minister Alexander Chikwanda and Mines Minister Christopher Yaluma to effect changes to the 2015 Mineral Royalty Tax by April 8th, this year.
In letters to the two ministers, President Lungu has stated that after receiving submissions from individual mining companies and the Chamber of Mines, he has noted that the new tax regime poses a challenge to some mining houses.
The President also noted that some mines are high-cost while others are low-cost operations.
President Lungu has reiterated government’s resolve to putting dialogue at the centre of the governance systems.
This is contained in a statement sent to media News by President Lungu’s Special Assistant for Press and Public Relations Amos Chanda.
Below is the full statement
PRESIDENT LUNGU DIRECTS CHANGES TO 2015 MINERAL ROYALTY TAX
Lusaka, (WEDNESDAY, 25 th March 2015) — His Excellency Mr. Edgar Chagwa Lungu, President of the Republic of Zambia has directed the Minister of Finance and Minister of Mines and Minerals Development to effect changes to the 2015 Mineral Royalty Tax by 8 th April 2015.
In letters to the two ministers today, President Lungu stated that after
receiving submissions from individual mining companies and the Chamber of Mines, he has noted that the new tax regime poses a challenge to some mining houses. The President also noted that some mines are high-cost while others are low-cost operations.
“Obviously the mining industry has been affected by copper prices on the international market. It is clear that this unfavourable economic trend globally has been mainly on account of weak global demand for copper,” the Head of State said.
“I wish to take this opportunity to reiterate my government’s resolve to continue putting dialogue at the centre of our governance systems. Dialogue between my government and the mines shall continue.”
The President emphasized that government will always be amenable to progressive ideas that will assist in addressing challenges in the mining sector.
The President notes that these challenges cannot be resolved overnight but he is confident that these matters are not insurmountable.
“I have therefore directed the Minister of Finance and the Minister of Mines, Energy and Water Development to review the mining tax regime and make recommendations to Cabinet by 8 th April 2015,” the President directed.
Among the options the President has asked the ministers to consider, are the following:
- Status quo but negotiate interim fiscal arrangements for operations that are most affected on a case-by-case basis;
- Identifying potential legal or regulatory modifications to the existing
2015 fiscal regime that could be readily passed and implemented;
- Defer implementation of the 2015 fiscal regime, and
- Temporary reinstate the 2014 fiscal regime as a more amicable regime is negotiated.
The President also directed that the ministers should also use the current legislation and administrative procedures to ensure that mines that are facing severe challenges are assisted.
The Head of State has meanwhile called on all individuals and corporate citizens to comply with the existing tax laws.