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Wednesday, 5 December 2007

A new tax regime?

Times of Zambia are reporting some developments on a new tax regime for mines. It appears the first time Zambians will get so see how the new regime looks like will be in the 2008 budget - no prior consultation has been announced:

Finance and National Planning Minister, Ng'andu Magande said in Lusaka yesterday that the team had almost completed its work and appealed to Zambians to be patient despite the long time the process had taken. Mr Magande told a Press briefing that the mandate for the re-negotiation team was extended to cater for the establishment of an optimal fiscal and regulatory regime for the mining sector. Emphasising that the team was wholly composed of Zambian top civil servants, Mr Magande said from its findings on the renegotiation, it became imperative to re-look at the entire tax regime for the sector.

Mr Magande said the planned optimal fiscal and regulatory regime when implemented might render the current and future development agreements irrelevant. He said it was important that the mining companies contributed more to Government to fulfil the stated purpose of development agreement on the need to secure maximum benefits for the local people. Because of the concessions given to the mining investors in 2000, their tax contribution now did not correspond with their revenues following the soaring metal prices on the international market, hence Government's decision to re-negotiate the agreements.

Update (7th December 2007) - The Minewatch blog has some interesting comments on this interesting development.

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