Windhoek, Namibia — 01 October 2013 – The government of Namibia has insisted that it will not cut Namdeb Diamond Corporation’s tax rate as the diamond producer “’ which is 50% owned by Anglo American plc “’ pushes for a review of its fiscal regime.
“We can’t entertain an idea that diamonds should be taxed at the same rate as other mining companies,” Namibian finance minister Saara Kuugongelwa-Amadhila said in a telephone interview with Bloomberg News. “We made a conscious decision to set the tax rate at 55% because those diamonds are highly valuable and Namibians should share in the benefits.”
Namdeb was in talks to cut the tax rate to 37.5%, the same level as other mining companies in the country, the Namibian Sun reported on September 26, citing Kennedy Hamutenya, the country’s diamond commissioner. “Namdeb, equally owned by Anglo American and the Namibian government, wants the tax rate reduced as it invests in technology to mine marine diamonds,” said company spokeswoman Pauline Thomas.
“The Namibian diamond mining fiscal regime is one of the highest in the world and goes beyond the tax rate of 55% on profits, as it also includes a royalty of 10% on turnover,” Thomas said in an e-mailed response to questions. “This fiscal regime has been unchanged for many years.”
“Namdeb is engaging with the Namibian government on the issue,” she added.
Namdeb produced 1.67Mcts of gemstones in 2012, of which 1.1Mcts were mined in the southwest African country’s Atlantic waters. These are home to an estimated 80Mcts, the richest known marine diamond deposits in the world, according to the company’s website.
Source: Bloomberg News. For more information, click here.