[ad_1]
Africa's second-largest copper producer plans to introduce new mining rights, replace value-added tax with sales tax, and increase royalties to reduce growing debt.
DOSSIER: Miners at work in a mine shaft. Image: AFP
LUSAKA – Zambian mining companies could lay off more than 21,000 workers due to reduced investment spending over the next three years if the government introduced higher taxes in January, an industry body said Tuesday.
Africa's second-largest copper producer plans to introduce new mining rights, replace value-added tax with sales tax, and increase royalties to reduce growing debt.
The Chamber of Mines said it met with officials from the Ministry of Finance last week to present its views on the likely impact of the tax changes in the 2019 budget, including cuts in capital spending of more than 500 million dollars.
"Our members continue to review their activities and must consider significantly reducing their capital expenditures by more than half a billion dollars over the next three years," said Talent Chamber spokesman Talent Ng & andwe, to Reuters questions.
"This would result in reductions of more than seven thousand direct jobs and more than double that number of indirect jobs."
Presidential spokesman Amos Chanda said the finance minister had informed the presidency that she would proceed with the implementation of the new taxes in January.
"The minister told us that mining companies were trying to resort to pressure tactics, but no sector was immune from our taxation system," Chanda said.
"Mining companies do not have the right to impose their proposal on the government. For the Minister of Finance, this is a fair tax system, "he said.
In its 2019 budget, the government announced its intention to increase the country's sliding scale by 1.5 percentage points for royalties from 4% to 6% and to introduce a new 10% tax when the price copper exceeds $ 7,500 per tonne.
The board proposed to increase the 0.5% sliding scale royalty rate to 7.5% when the price of copper exceeds $ 7,500 a tonne, Ng'andwe said.
Mining accounts for more than 70% of Zambia's foreign exchange earnings, and companies operating in this southern African country include First Quantum Minerals, Barrick Gold Corp, Glencore and Vedanta Resources.
Zambia said it is committed to improving the transparency of its debt management and that it will ensure that its debt levels remain sustainable.
The International Monetary Fund rejected Zambia's borrowing plans earlier this year and said it was exposed to a high risk of debt distress, which discouraged investors with Zambian debt.
[ad_2]
Source link
