Pamela Chisanga with Action Aid Members
A consortium of civil society organisation has maintained that the proposed mineral royalty tax bands are retrogressive and will compromise mineral resource revenue collection.

In a statement in response to a press statement issued by the Chamber of Mines last week, the civil society organisations restated their position that the resources should be left in the ground for exploitation by future generations if current regulations are deemed too onerous by potential and current investors.

The organisations are part of the Publish What You Pay Zambia and the Zambia Tax Platform.

“We wish to re-emphasize the we are in total support of having progressive tax reforms in the mining sector, however, the proposed tax bands as the floor and ceiling tax rates pegged to the value of the mineral on the London Metal Stock exchange are too low, investor led and do not represent the interests of the Zambian people in getting a meaningful compensation share for mineral extraction,” they said.

They added, “It’s of our understanding that the mineral royalty tax is meant to be a compensation for mineral resource extraction, but however the new tax bands will not enhance revenue collection for compensation in times of commodity booms which subsequently lead to increased production in the mining sector.”

They also expressed displeasure at statements issued by the Chamber of Mines president Nathan Chishimba who amongst other things claimed that civil societies reasoning on mineral resources was “short-term thinking” by claiming that “mineral resources are finite, and Zambia needs to make the most of what it has while it has it.”

“We wish to remind Mr Nathan Chishimba that Zambia has been mining for over a century and evidently Zambia has not been able to make the most of resource post privatization which subsequent come with a number of incentives,” they said.
They charged that it is immoral for a country with high levels of poverty and inequality to continue to make decisions of this nature that compromise its ability to generate its own resources and address its challenges domestically.

“We Civil Society also wish to re-commit ourselves to research on the impact of current tax regimes and campaign for reforms at the national and international level to ensure that the taxing rights of our countries are not undermined by abusive international tax practices and investors. Consequently, we will neither be intimated nor silenced on this matter.”

They added, “With respect to this, we firmly demand government to justify and disclose to the public the tax revenue that will be forgone with the implementation of the new tax regime sliding mineral royalty tax regime verse the double tier regime of 6% for underground and 9% for open cast mining as legislated in the 2015 Mines and Minerals Act.”

“Furthermore, we urge government to consider engaging in a more consultative and participatory process in developing taxation regimes and we also urge our governments to establish mechanisms to conserve adequate revenue gleaned from mining operations for future stability, growth and unforeseen downturns,” they said.

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11 COMMENTS

  1. Mr Chishimba for once behave like a real Zambian,surely are you happy with what the country is collecting from these mine companies. If the so called investors are not happy let them go, we can always start afresh and do the right thing for mother Zambia

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    • Welcome to the PF world of chaos and flipflopping. Everything is experimental because there is no vision and forethought. This is the most incompetent govt Zambia will ever have.
      #ChagwaMustFall
      #PFmustGo

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  2. chikwandanomics are typical chipantepante economics , he introduced an SI few days down the line it was removed everything is try and error and experimenting.The man is just good at Borrowing kwasila.
    Every Zambian will feel this burdern of careless borrowing just to do shoddy roads which never last.
    todate the borrowed funds have not yet been paid back..they havent even told zambians what plans have been put in place to pay back.Mines are still be owed huge sums of money in V.A.T

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    • YABA BUT PA ZAMBIA. THERE’S ALWAYS A “PULL DOWNER”. EVEN FOR SOMETHING POSITIVE MPAKAFYE CIMO CILANDEPO IFYABUSHILU

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  3. I agree with you CSOs. The solution is not borrowing & receiving donations from other countries but charging adequate rates on our resources, minerals, labour, professional sports men & women, mukula tree, maize inclusive. The more we fail to charge equitable rates on our resources the more other countries charge adequate rates on the same resources & they come back to Zambia as loans and donations for us to repay at higher rates. The fear we always have that investors will leave is simply nightmare. What genuine investors need is conducive business environment but not low tax rates in un conducive environment, eg corruption, poor infrastructure, poor labbour & laws. However, other dubious investors prefer corrupt environment or else if you remove corruption they will fly away even if you…

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  4. I am not surprised by this..as I stated last week when I read that the Chamber of Mines was commending the govt for this new mining tax bands as this organisation is there to serve the interests of its members; it would care less if its members paid 0% tax.

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  5. Leave the minerals in the ground for future generations? What do you smoke? Do you know what will be the rate of kwacha to dollar? K1,000,000 per dollar, and you guys can’t even survive K14 per dollar! The lady in the picture addressing others wont even afford a few personal basic necessities.

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  6. This is the kind of manure in which HH thrives like a worm. As sure as night gives way to day everyday, tomorrow HH will issue a statement lying through his teeth that “…when I come to power in August, I will reintroduce windfall tax within seven days”. And he knows that he is telling lies but he thinks “…musankwa Gary, those morons dont even see my lies…..hehehe i am too smart for them…”.

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    • You must be living in a dark forest somewhere. That’s how you have missed the fact that PF have changed taxation for the mines four times in the last 5 years and that HH is not yet President of Zambia. Even what the CSOs are protesting about is another fishing trip by PF who have no clue what to do with running a country.
      #ChagwaMustFall
      #PFmustGo

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  7. Why don’t we settle for a dynamic royalty tax regime that will address changes in commodity prices at any point in time. This way, whether it’s high tide or low tide on the international economic platform, we will always get a fair share.

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  8. Welcome to the PF world of chaos and flipflopping. Everything is experimental because there is no vision and forethought. This is the most incompetent govt Zambia will ever have.
    #ChagwaMustFall
    #PFmustGo

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