The Chamber of Mines, an organisation that represents mine owners interests has succeeded in re-opening a negotiation process with the Zambian government.
This was made known in a statement by Minister of Finance Margaret Mwanakatwe, who announced that a tax Policy Review Committee will be reconstituted and appointed.
The Finance Minister stated that “to deal with technical issues related to tax implementation matters raised by the public to ensure smooth transition following changes in the mining tax regime”.
Mwanakatwe says her Ministry has taken note of the public statement made by the Zambia Chamber of Mines regarding changes to the Mining tax regime in the 2019 National Budget.
This is contained in statement issued by Ministry of Finance spokesperson Chileshe Kandeta emailed to the Zambian Business Times – ZBT.
Mrs. Mwanakatwe has further advised that consultations on sales tax policy implementation will be wide and extensive before commencement in April 2019.
She says her ministry remains open to dialogue with mining companies that are willing to amicably discuss the transition to the new mining tax regime, implementation of the sales tax and other fiscal and economic affairs, and future business cooperation matters.
“In view of the foregoing and in respect of our own plan to ensure a smooth transition, the Tax Policy Review Committee will be reconstituted and appointed to deal with technical issues related to tax implementation matters raised by the public,” she said.
However, this move may also be construed as back-pedling as the process of budget consultation is supposed to be done prior to budget announcement to avoid reversals and major changes to the announced budget.
Its a well known that the mines contribute over 70% of the foreign exchange earned in Zambia and the consultation process with the mines should have been held at both high levels and technical levels way before announcing any policy proposals.
It can also be debated that the defering of the date of implementation from the 1st of January to the 1st of April 2019 for the mining tax policy proposals announced was perhaps a signal that there was no consensus even within the economic management team at the Ministry of Finance.
The absence of a special regulatory agency to deal with both the economic and the technical aspect of the mining industry in Zambia is considered a major missing link.
The country has continued to rely on the Ministry of Mines to keep abreast with the privately run copper and cobalt mines has simply not yielded the desired results as the ministry have not been able to attract top mining experts who are capable of going head to head in negotiations with the local mining units management teams.
Other more technical industries like Telco’s have a special agency, ZICTA that has tried to keep abreast and today, the Telco sector has registered considerable growth levels in both treasury contribution and internet penetration in Zambia.