LUSAKA Zambia (Xinhua) --
The proposed new changes to mining tax regime
will affect Zambia’s potential to conduct mineral explorations,
an industry body said on Tuesday.
In its 2019 budget
unveiled last month, the Zambian government announced new tax
measures in efforts aimed at getting more revenue from the
mining sector, which accounts for about 70 percent of the
country’s foreign exchange earnings.
Margaret Mwanakatwe said the government intends to increase
mineral royalty rates by 1.5 percentage points at all levels of
the sliding scale as well as introduce a fourth tier rate at 10
percent on the sliding scale mineral royalty regime which would
apply when copper prices rise beyond 7,500 U.S. dollars per ton.
the president of the Association of Zambia Mineral Exploration
Companies (AZMEC), said the proposed measures will have negative
consequences for the mineral exploration sector as it runs
contrary to THE government’s policy of increased mineral
exploration and growth of the mining sector.
He said mineral
exploration was an inherently high cost, high risk activity and
added that no new viable copper discoveries had been made over
the past 10 years in the country.
independence, only two discoveries have been made. Dramatically
increased exploration activities are now required, more than
ever, if Zambia is to remain a leading copper producer,” he
Zambia, he said,
needed to match other countries like the Democratic Republic of
Congo (DRC), where exploration has increased over the years,
translating into increased production, employment and tax
Unless new deposits
are discovered and developed, the mining industry in Zambia will
continue to stagnate and ultimately contract with negative
consequences for the nation as tax collection, employment,
suppliers and export revenue all contract, he added.
The proposed changes
in the mining tax regime have been received with mixed feelings,
with mining firms saying it was a blow towards efforts to
increase investment in the sector.
But the government
has promised to put in a place a committee to review the tax
proposals in consultation with stakeholders.