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Thursday, August 6, 2020

Government bows to mines request and removes 7.5% duty on importation of copper concentrates

Headlines Government bows to mines request and removes 7.5% duty on importation...

Mining firms have once more gotten their way as parliament has removed the 7.5% budget proposal on importation of copper concentrates.

The mining firms last week threatened to pull out of the country if government implemented the proposed importation duty on copper concentrates.

A source close to the mines last week said that mine owners had said that the 7.5% import duty was going to be too high and that it would increase operating costs.

The source said the mines feel the increase in cost of doing business will threaten the viability of their firms and that the mine owners were considering taking their smelters to the Democratic Republic of Congo were production costs are cheaper.

But the Ministry of Finance has explained that Parliament has removed the proposed 7.5% importation duty on copper concentrates.

In a statement, the Ministry explains that the removal has been necessitated after an elaborate consultative process with the Parliamentary Estimates Committee and Stakeholders, is consistent with the government’s diversification drive, and a decision in the right direction.

Below is a statement as issued by the Ministry

DIVERSIFICATION DRIVE BOOSTED

Lusaka, Wednesday, 21st December, 2016. The action today by Parliament to remove the 7.5% budget proposal on importation of copper concentrates, necessitated after an elaborate consultative process with the Parliamentary Estimates Committee and Stakeholders, is consistent with the government’s diversification drive, and a decision in the right direction.

The action also exemplifies harmony with government’s commitment to diversify the economy through enhanced investment in agriculture, tourism and manufacturing – while stabilizing the mining sector and enabling effective smelter capacity utilisation, quality value addition, enriched exploration, and creation of permanent jobs.

The removal of the 7.5% proposal on importation of copper concentrates from the 2017 budget is a clear sign that the government is dedicated to managing the economy on a platform of respectable partnerships and stability of private sector investment. The measure by the government through Parliament, first and foremost, warrants the protection of jobs and, secondly, strengthens the diversification drive by instituting safeguard measures aimed at improving and sustaining the competitiveness of the local industry in the global economy. Zambia has an excess smelting capacity of over 1.2 million metric tons per annum.

The estimated K500 million, which was expected to be raised from the imposition of a 7.5% duty on importation of copper concentrates in 2017, will be compensated, recovered and possibly surpassed through the dividends which government is expected to receive from the industry.

As a Ministry, we are pleased that several mining houses have made commitments to undertake more exploration and development activities. It is our hope that their commitment will be operationalised soon, consistent with the expectations of our mutually beneficial development partnership.

Meanwhile, the Ministry of Finance expresses gratitude for the USD 300 million planned injection by private investors for manufacturing of copper wires in the Chambishi MFEZ on the Copperbelt Province. We now hope to see its timely realization so that our diversification trajectory is sustained in line with our goal of remaining focused on attaining broad development objectives of wealth creation, employment generation, and poverty reduction.

\\ORIGINAL SIGNED\\

Chileshe Kandeta
Head – Media & Public Relations
For/MINISTRY OF FINANCE

55 COMMENTS

    • Very stup!d! Slave begging mentality for sure! At least that stup!d parliament should have reduced it to 4.5% not removing the whole 7,5%. Do you know how much poor zambians are losing?? Go to Switzerland and see what zambian money is doing to uplift muzungu life

    • Who will pay for that budget Mutati was presenting? These mining firms are having it easy here, while workers are to pay 37.5% PAE. Whose interest do our MPs represent? if the question is to be asked.

    • Right decision by the Government. Should never have been done haste.

      Only a 4ool not even understand what happens to the taxed money – will
      Claim we are disadvantaged.

      You do these things subtly.

      Thanks

      Thanks

      BB2014

      Bb2014

    • This is positive leadership.

      The is always need to avoid any form of rigidity when youbare a leader.

      Understanding times and seasons is critical for any leader.

  1. Like Chakolwa, visionless flipflopping with a tinge of corruption.
    Zambia is in serious trouble, with a leader whos only fit io be a D.J, or Kwasa- Kwasa Dancer.
    SHAME!!

  2. Processing copper concentrates creates jobs and this keep smelters operational. In some way is good move but amount could calculations of 7.5% leaves much to be desired. Now it looks either 7.5% or zero %.

  3. When you send a dull empty tin like Christopher Yaluma as your Chief Negotiator in a room full of saavy Mining CEOs do you honestly except any good deal even where you have leverage…really laughable…have heard this man speak.

  4. Show me a corrupt president in the world and i will show you Edgar Wrungu and a certain amount will be deposited in edgar wrungu’s personal account.

  5. These flip flop moves are showing a clear lack of thought, foresight and direction. It seems the corporations still have the muscle to twist feeble governments. One wonders who was negotiating to come down to a total 0%. Someone should be fired.
    Any way it’s better to flip flop with our current leaders than to be led by a Kaponya like (HH) who sold our mines for a song in the 90s.

    • Iam feeling very afraid with what is going on in Zambia?Today the govt says one thing and tomorrow it says another thing. There is what is called due diligence.This is where you initiate a study to find out what will be the effect of some proposed Taxes on certain industries before they are implemented. At the rate we are going, Zambia is in very big trouble. We have a govt which is lost in the ituri forest and it doesnt even have a clue how it will come out. CRY MY BELOVED NATION

  6. Ati “The estimated K500 million, which was expected to be raised from the imposition of a 7.5% duty on importation of copper concentrates in 2017, will be compensated, recovered and possibly surpassed through the dividends which government is EXPECTED to receive from the industry.” If you knew this why then did you choose to impose the 7.5% duty on imported concentrates? One wonders whether this EXPECTATION will be realised come December 2017.

    • Now that we will passed on to the poor taxpayer or a high interest loan to fill that void that is Lazy Lungu’s incompetent govt for you!!

    • *Now that will be passed on to the poor taxpayer or a high interest loan will be contracted to fill that void; that is Lazy Lungu’s incompetent govt for you!!

  7. Does Parliament have the mandate to remove the tax measure and look for new tax measures to replace the duty loss? The scraping of this tax measure was done by MPs instead of the Ministry of Finance withdrawing the tax measure after being convinced by the mines to do so post Budget. B4 the Budget was finalised govt should have discussed this tax measure with the Mines during the Budget Consultation and Preparation process. Its akward that govt negotiated with the mines the withdrawal of the Tax Measure after the Budget was announced. In future Minister of Finance should hold pre-budget consultion with the Mines and announce what will have been agreed during Budget preparation and consultation process. The Minister of Finance should instead negotiate with the mines b4 the Budget is…

    • I agree with you, mate. If indeed the estimated revenue in the budget would be surpassed, as Chileshe claims, why did then did we introduce the tax in the first place? Would it be wrong if I averred that it took the mine owners to tell us that, ‘ look you f**ls, you can still get your projected revenue through dividends that will result from processing the concentrates’? Have we ever heard of the Laffer principle?

    • Budget analyst note that the tax law has to pass through parliament. I agree with you that Its akward that govt negotiated with the mines the withdrawal of the Tax Measure after the Budget was announced. Now that will be recovered through poor tax payers

  8. Incompetent ,Corrupt, Visionless PF government.

    Miners have taken advantage of this useless government whose leaders lack fiscal descipline except for their pockets.

    Very disgusting.!

  9. Mutati is clueless about how to improve the economy and living standards of the people of Zambia. In two weeks he has proposed more borrowing to refinance debt and proposed changes to the 2017 budget after he presented it to parliament barely a month ago. This kind of policy inconsistency is alarming at a time when Zambia requires policies that will ensure improved economic management. In developed countries the Minister of Finance would step down. To rely on dividends which might not be paid compared to a tax which backed by law and therefore more certain only shows lack of understanding and foresight on the part of the Minister of Finance. How can you foregore K500 million tax revenue for a dividend which is unknown????

    • This is the same Minister Mutati who has been critical of the previous Minister of Finance Mr Chikwanda of policy inconsistencies…Mr Mutati is not a performer because he’s all over making statements…People who talk too much are not performers look at shi Nono same same…

  10. The reason why Africa has remained underdeveloped every foreign country knows how to rip Africa.
    We can have all what we have we still remain poor , and they say Africa has all wealth under them but continue to suffer poverty.

  11. Chipate pate planning and negotiations, the increase should not have happened in the the first place, so Mutati is now making a f.o.o.l of himself. Why? Because the 7.5% was part of Mutati budget as a revenue. Under this circumstance, who will supplement the budget to fill that hole?

  12. This move by these idots, will make the mines close forever, the only operation we will have in Zambia are smelters. Already KCM had in the recent past imported concentrate from Chile. So you idots wont even get the PAYE because the most labor intensive institutions on the Copperbelt or Zambia are the Mines. So if you do not understand this, in lay man’s language the country has lost twice in the same game.

  13. We need an intellectual revolution in Zambia’s political landscape. Most of you bloggers sound intelligent,
    but you don’t want to come out and be part of people to practically turn things around. Rise to the occasion and be part of revolution or else you keep seeding dunderheads to parliament. They agree to everything thoughtlessly.

    • @ 20, HOW??
      Come back to a CORRUPT BANANA REPUBLIC, where no one bats an eyelid when elections are stolen, & the wrong visionless Drunken Dancing Cowboys are in charge of [email protected]!ng the nation??
      A place where a Criminal with a stinking unprofessional record of embezzling clients cash is rewarded & nominated to lead a party, & as a result goes on rule, & destroy a Nation?
      I’M SORRY SHAKA, BUT ONE WOULD NEED SERIOUS MENTAL ASSESSMENT, EVALUATION, & PROBABLY ADMISSION TO CHAINAMA HILLS, IF THEY DECIDED TO LEAVE SANITY, & RETURN TO THE CIRCUS THAT IS CALLED ZAMBIA, TODAY.
      Just ask Clive Chirwa!!

  14. Yes Guys,
    In the process, Zambia shoulders the following responsibilities:
    1) She makes the country(ies) mining that copper more profitable. The bulk of the production cost is already borne by them in their home region
    2) Zambia pays for the pollution. Smelting is the most polluting unit operation in mining
    3) Zambian workers feel the brunt of the most hazardous part of copper production
    4) Zambia “launders” another man’s dirty concentrate, and
    5) Zambia faces the greatest risks from theft and fraud from the copper cathodes
    AT NO COST BUT GRATIS. ALL THE COUNTRY WILL BE PAID IS TCRC (treatment and refining cost)
    We should learn from the Japanese. They have 5 companies smelting and refining copper, all from imported concentrates.

    • I really don’t understand what is going on here, are we saying we have done away with oring in Zambia and have now become importers of ores? Was duty a means of discouraging these ore imports in order to safeguard the oring ventures? How much is involved in freight and other logistic costs, damage to the roads etc? What is the future of mining in Zambia is it going to be like importing chickens from SA at the expense of local farming?

  15. I have been in business and i have never been in negotiations where the final deal one party gets its way 100%.That is not negotiation it is capitulation by one party.The mines always get their way.Royalty tax they govt was made to go from 20% to zero.Now it is from 7.5% to zero! Why not meet half way.It should bother Zambians.Let see if the mines will agree to paying cost reflective tarriff like us.This where you miss Sata and admire firm leaders like Magufuli.

  16. The mines are really getting away with murder because weak and compromised leadership.These guys have too much concessions on forex,vat,power,retrenchment of worker,royalty tax,windfall tax,no income tax due to capital allowances. As for recent negotiations in other countries Felix Mutati should not have part of gvt team due to conflict of interests.His elder brother,Emmanuel Mutati is chairman of Mopani mines.

  17. The government should have told the mine owners to go to DRC, there is no peace in Congo anything can happen, Zambia is stable so it’s conducive for investors, PF is selling the country

  18. Mbale mwebo – even those who have stashed stolen cash in Swiss accounts: Bushe kwena can’t you please bring that cash back to Zed and invest in these mines so that we can use the profits we earn INSIDE the country kanshi??? Bushe kanshi cinativuta niciyani kupanga business mu dziko bati? Iwe Mutati, can you not make things easier for Zedians by discussing some of these matters before kaja ka speech mu palament? Awe mwe! Nafulwa sana! Iwe naiwe Kandeta! Siniyika ‘ka’ cifukwa uli kudala Ka-ndeta! Akapumi kwati ka peele! Please, stop your 18th Century spin and just tell us the truth. So you were planning taxes for extra-curricula expenses bati!? Just remove them easily like that?

  19. Mutati and Yaluma are useless. Yaluma has bern in that seat for too long hence cuts deals with the mines using tricks that he has learnt over a long time. Mutati will always favour the mines because of his brother who is chairman at Mopani; just like Chikwanda favoured the mines because of the business that they were giving him through his company Sigma Enterprises and Appolo.

  20. I just wish everyone a happy a happy Christmas and a prosperous new year. One Zambia, One nation. I will go on break and i will return in 2017. Hopefully Lungu’s administration will not be violet to the opposition in 2017

  21. Obviously someone somewhere has been bribed with huge commissions or kickbacks. If the mine owners threaten to pull out, let them. Are there no other investors who are able to pay that kind of duty?What you should be protecting are the common man’s interests, the poor villagers just there in north-western whose villages are sitting on wealth.

  22. LISTEN BOYS..

    A TRUE MINING COMPANY DOES NOT NEED TO IMPORT CONCENTRATE…… IT SHOULD MINE ORE AND PRODUCE ITS OWN CONCENTRATE.

    HOWEVER, A PROCESSING COMPANY, LIKE MANGO JUICE FACTORY, MAY NEED TO IMPORT INPUTS.

  23. Mmutati need togo back to Parley to re-present the budget again coz this 7.5 drop is too.big a revenue to cause an earthquake on the budget recently presented..

  24. i knew mutati was shooting himself in the foot when he presented his budget with that 7.5 % import duty. that mainly affected mopani copper mine who shut down their muf under ground mine. they depend on concentrates from frontier mine and a little coming from nkana. it meant more job loses that side and would have crippled the already struggling mining town. besides, him and his brother have contracts to transport some of these concentrates between congo and zambia. besides the whole of mufulira is resting on a sink hole dug over a period of 87 years, give it a break brothers.

  25. Mining hasn’t developed zambia, why not try agriculture.
    Ethiopia is doing well with it, Kenya has developed because of agricultural products.
    Better to shelf mining and stop fighting battles that we always fail to win.

  26. It pains me when I visit Zambia and as you take a drive from say Chingola to Kabwe for example, miles and miles of untapped land. But when you pay attention to the Zim & SA settlers in the Mukushi area and see what they are doing agric wise, if only it could become a national program our soil is so fertile and boreholes are easy to install labor fyani! Zambia is a prime candidate for what the west is today calling sustainable farming, the Late LPM had an eye for this as an income generating sector for the nation, unfortunately he passed away so did the vision of a Zambia less dependent on copper.

    Imagine all that land, and where the country lies geographically only for greed and vision to become an obstacle. God has given us all we need, but we lay idle and suffer, its such a shame,…

  27. but for sure as time goes by I still Believe Lesa Wandi Talala! And these same mining companies were are they going to go? Because neighboring Angola stands at 4% flat but there is a catch, Bostwana @ 7% and at that there is a catch, am not sure about Congo at the moment but I can promise you this foreigners are not just going to neighboring countries and threatening to pull out like its a Kantemba business after all some of them are even operating undercode and polluting yet no one is calling them out on that. Then when you turn to Gov to deal with the short falls there is no money to deal with that capacity, but yet these are the companies that are not even putting back to emulate what they are taking out. Overall mining has failed and before this whole nuclear thing in the air…

  28. Government should strongly consider investing into think tanks and look at some models of restructuring. Tanzania, Kenya, Ethiopia are three eastern countries that are benefitting and you can see the change.

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