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Thursday, 16 October 2008

Mining windfall tax in tatters, 4th Edition

Early this week, the Minister of Mines Kalombo Mwansa refuted reports that the government has entered into renegotiations with mining companies to restore the defunct development agreements (DAs) that gave mining companies huge tax incentives. Apparently the "negotiations" are all to do with a little arithmetic problem :

"We are not renegotiating anything. Besides, the new taxes have become a law and it is wrong to negotiate anything outside the law but we are engaging mining companies on the newly imposed mining taxes in order to harmonise the situation because government is aware that calculation of effective tax rates at 47 per cent is still an issue on the part of some mining companies..."

"Their (First Quantum) calculations indicate that they are paying more than the 47 per cent effective tax rate and this is what we are discussing and not restorations of the defunct mining agreements so consultations are on going to find common ground..."

"....the finance ministry has already started to engage the companies on the matter but the purpose of the new fiscal regime is to enable the companies continue to operate viably while contributing a little more in government revenue for the benefit of Zambians."

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