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Friday, 17 October 2014

Zambia's Sixth National Development Plan

I have been forgetting to share this document, though I suspect many of you may already have downloaded it from other sources. This is the plan that defines what the Patriotic Front are allegedly aiming for in Zambia as they seek re-election in 2016.



Copyright © Zambian Economist 2014

Wednesday, 15 October 2014

A new mining tax regime

Finance Minister Alexander Chikwanda last week delivered the Budget Statement 2015. As the Post newspaper already revealed, government is reducing its share in ZCCM-IH to 60%. Chikwanda also appeared to signal that the contentious VAT rule is here to stay. The big one of course is the redesign of the tax regime for mining operations by replacing the current two tier system with the following mining tax structure:

(a) 8 percent Mineral Royalty for underground mining operations as a final tax;
(b) 20 percent Mineral Royalty for open cast mining operations as a final tax.
(c) 30 percent Corporate IncomeTax rate on income earned from tolling; and
(d) 30 percent Corporate Income Tax rate on income earned from processing of purchased mineral ores, concentrates and any other semi-processed minerals, currently taxed as income from mining operations

Effectively what the measures do is increase underground mining royalties to 8 percent from 6 percent. It has also introduced a 30 percent corporate processing and smelting tax. Another 30 percent tax would be applied to income earned from “tolling”, industry-speak for an agreement to process another producers raw materials.

Sunday, 12 October 2014

2015 Budget in Words

A visual representation of the Budget yesterday as delivered.  I thought it was worth showing how the word "continue" stands out. The main surprise is how often the word governance is used!


AUTHOR 
Chola Mukanga 
Economist | Researcher 
Copyright © Zambian Economist 2014

Friday, 10 October 2014

Zambia Budget 2015

Finance Minister Alexander Chikwanda delivered the Budget Statement 2015 earlier today. I have read through it but not fully process it. Everything in the Budget was leaked to the Post newspaper. There are no surprises in that sense. In short it a budget short of new things - the word "continue" seems to be all over it. However it does contain important proposals relation to the mining fiscal regime and ZCCM-IH. More discussion on the proposals in due course. 



AUTHOR
Chola Mukanga
Economist | Researcher
Copyright © Zambian Economist 2014

Monday, 6 October 2014

New Kwacha Trading on JSE

By Mawano Kambeu

On October 3rd, 2014 the Zambian Kwacha, Nigerian Naira and Kenyan Shilling debuted the Johannesburg Stock Exchange (JSE). This is the largest and most liquid stick exchange in Africa. The move has been heralded as a milestone by Government but with little explanation in the media about what it really means for ordinary Zambians. This article is designed to address some common questions that have been posed by the public.

What is actually being traded on JSE?

The forex market on the JSE is not a currency bureau, where people can buy and sell the kwacha. This is a futures market, where investors and businesses that import or export can buy Currency Options or Currency futures, which belong to the derivatives market.

Sunday, 5 October 2014

VAT refund crisis

Glencore (owners of Mopani Copper Mines) last week halted operations at its Sable Zinc Kabwe mine because of withheld valued-added tax refunds owed to the company. Mopani has also suspended part of an $800 million plan to boost production of copper by 50 percent.

The Zambia Revenue Authority has held back on paying mostly mining companies more than $600 million VAT refunds, because it says exporters haven’t complied with a rule requiring import documents from the countries the products end up in. Mopani alone is owed more than $200 million in refunds.