Mineral royalties hiked to 3 p.c
By Isabel Chimangeni
GOVERNMENT has informed mining companies of its intention to increase mineral royalty tax from the current 0.6 per cent to around three per cent as a way of reaping benefits from the rising copper prices, which have hit an all time record high.
The decision to increase mineral royalties from the current 0.6 per cent to around three per cent was meant to be in line with the prevailing economic trends and mining firms have indicated willingness to pay.
Finance and National Planning Minister, Ng’andu Magande, disclosed in an interview in Lusaka yesterday that the increment in mineral royalties was subject to negotiations with mining companies.
Mr Magande said the Government was also reviewing other taxes, which firms were exempted from paying when they received mining licences and that mining companies had been informed about the increases.
He said the mining companies indicated a willingness to pay and that the new taxes could be introduced before the close of the year.
The Government was reviewing what was agreed upon hence the need to go back to the negotiating table with mining firms and other parties involved, changing things to suit the current environment.
Copper prices have, however, since the first quarter of the year recorded an all time high of above $8, 000 a tonne with yesterday trading around US$7, 500 a tonne.
Mr Magande said the average mineral royalty in the world was about 2.5 per cent to 3.0 per cent and that was the margin the Government was working on.
He said the new royalty structure would be introduced before the end of the year and would help the government meet its commitment to improve education and health.
The minister has, however, defended the decision made by the then government of offering such incentives to mining companies saying if such a decision was not made, the country’s economy would have collapsed.
Mr Magande said a number of factors were taken into consideration when such a decision was made but that time had come to review the development agreements to be in line with the prevailing economic situation. |
