As a means to improve public understanding of the Zambia mineral royalty tax and to promote informed comment, the Zambia Chamber of Mines has urged Zambians to download its report on Mineral Royalty Tax.
This follows strong endorsement by leading business personalities, who said the report would promote greater understanding of a complex issue which affects them.
The report, “A guide to understanding Mineral Royalty Tax”, has already been distributed widely, and is available free of charge on the Chamber’s website.
Stakeholders who have welcomed its publication, saying it will help to promote informed comment, include Osbert Sikazwe, Dean of the School of Mines at the University of Zambia; Maybin Nsupila, CEO of the Zambia Association of Manufacturers; Yusuf Dodia, chairman of the Private Sector Development Association; prominent Lusaka businessman Mark O’Donnell; and Jackson Sikamo, country manager for Chibuluma Copper Mines.
Osbert Sikazwe, Dean of the School of Mines, said the report will help the public to understand the wider operations of the mining sector, and to appreciate the challenges faced by the industry. It will also help people to understand how policy is formulated to enhance the growth of the industry, he said.
Maybin Nsupila, CEO of the Zambia Association of Manufacturers, said any measure intended to promote debate and understanding of MRT is welcome. “The discourse by many people has been on the physical contributions the sector makes to the country’s economic growth, without understanding how the linkages ultimately benefit the country. The MRT report will give people a broader and more informed perspective.”
Yusuf Dodia, chairman of the Private Sector Development Association said mining plays a pivotal role in economic growth. While there have been challenges on policy as well as tax changes, there has been little or no understanding of the challenges faced by the industry. “The MRT report will widen debate and promote a more informed view.”
Moreover, Jackson Sikamo, country manager for Chibuluma Mines, a division of Metorex, said the report will help all stakeholders to appreciate what MRT is, and what its implications on fiscal policy are. “It will lead to better-informed dialogue and debate, which are necessary for the country to come up with equitable taxation policies,” he said.
Prominent Lusaka businessman, and chairman of Union Gold Investment, Mark O’Donnell, welcomed the release of the report, given the competition Zambia faces from other commodity-producing countries. These include the Democratic Republic of Congo, which has “maximized the benefits realised from the mining sector, spurred by various incentives which have increased foreign direct investment”.
Meanwhile, Chenai Mukumba, international centre coordinator for Consumer Unity and Trust Society, described the release of the report as timely. “The initiative will help ease the misunderstanding among various players, especially the citizenry, who lack information yet are the ultimate beneficiaries of the mineral wealth.”
Peter Sinkamba, Development Planner/Environmental Protection Activist on the Copperbelt, said the MRT report will help to strengthen citizens’ awareness, and promote dialogue on challenges, contributions and shortcomings on policy formulation that might stifle the effective contributions of the mining and copper sector to the country’s growth.
In January 2015, newly inaugurated Zambian President Edgar Lungu revealed the country’s new tax regime which at the time included increasing levies for open cast mines from 6% to 20%, while those for underground mines would rise to 8%.
In April however, the royalty was dropped to 9% across the board – Zambia’s response to severe outcry from industry and its negative impact on mining profits, closures and job losses.
The mine tax system also re-introduced a 30% corporate income tax on mining operations.