The government of Zambia is in the process of reviewing the mining tax framework with key stakeholders to design a regime that would be stable, predictable and competitive.
Mines Minister Paul Kabuswe confirmed the report and said that the framework is set to attract both local and foreign investment in mining and ultimately scale up mineral production in the country
The mining industry is key for heavily indebted Zambia, accounting for 10% of the country’s GDP and more than 70% of its foreign exchange earnings. The mining sector is a major contributor to foreign direct investment, and mining tax revenues contribute a significant portion of total government revenue. The sector is also a significant source of formal employment both directly and indirectly which is a result of it being a more mature mining economy.
Double taxation
However, Mining companies operating in Zambia have long complained about double taxation in a country where, since 2019, mineral royalty payments are not treated as a deductible expense when calculating corporate income tax.
Kabuswe also said he would report back to parliament about Konkola Copper Mines (KCM) and Mopani Copper Mines after “thorough consultations”. Zambia took on $1.5 billion in debt to buy Mopani from Glencore in January and is yet to find a new investor for it. The previous administration handed control of KCM to a provisional liquidator in May 2019, triggering an ongoing legal dispute with its former owner Vedanta.
“The people of Zambia voted for change to protect and better manage national strategic assets such as KCM and MCM,” Kabuswe said.
