Cabinet has today approved changes to the Mineral Royalty Tax regime and President Edgar Lungu has directed Ministers to bring to Cabinet
next Monday details to be presented to Parliament for approval.
This is contained in a media statement released to the media by the Head of State’s Special Assistant for Press & Public Relations Amos Chanda.
According to the statement, the change follows extensive consultations with the mining industry in the light of significant changes in the fundamental assumptions upon which the law was based and the sudden fall in the price of copper on the international market.
The budget approved by Parliament had the assumption that the price of copper was going to be US$6,780 per tonne but this has reduced to US$5,665 representing a reduction of $1,115. Production, which was also assumed to likely, stay at a peak of 959,696 tonnes has since dropped to 839,000 tonnes representing a drop by 130,696 tonnes.
All administrative and legislative procedures to effect the changes will be completed before the next cabinet meeting.
These measures will have revenue implications given the fact the basic assumptions in the budget regarding the price of copper and production have changed downwards. The changes to the MRT regime will have revenue implications requiring rationalization of expenditure, which the Minister of Finance has been directed to present to Parliament.
The President has also directed that the Technical Committee he appointed to interrogate the challenges that arose from the MRT regime will continue with consultations with stakeholders to ensure a robust and predictable mining tax regime, which will be linked to the Medium Term Expenditure Framework. The President hopes that the changes will promptly eliminate market anxieties in the mining sector and forestall any potential instability.