Windhoek, Namibia — MININGREVIEW.COM — 07 March 2012 – The Namibian government’s disputed export levy on unprocessed mineral resources will soon become a reality, according to a media report here.
AllAfrica.com reports that the “Namibian Economist” has established this fact. It quotes finance minister Saara Kuugongelwa-Amadhila as saying that she was confident that by the end of the first quarter of this year, her Ministry would approach parliament with proposals on the different levies to be charged on the affected resources, despite resistance from the Chamber of Mines.
She said: “On the export levy, we are trying to determine what the rate of the levy will be on the resources affected. It’s a very involved process and it is ongoing, but we are confident that by the end of the first quarter of 2012 we will approach parliament with proposals.”
The minister pointed out that the chamber was objecting to the proposed 0 to 2% range, but said the department thought it was fair and balanced. “So we will proceed to determine the rates for the different products despite their objections,” she added.
In August last year, government was forced to defer the introduction of a raft of mining taxes following spirited resistance from the Chamber of Mines, which argued that any new taxes would “kill the goose that laid the golden egg.”
As part of the proposed amendments to the tax legislation, government announced last July that mines would have to pay VAT of 15% on the export value of unprocessed minerals. It also proposed a 5% levy on the export of raw materials, as well as an increase in the corporate income tax rate for non-diamond mining activities to 44%, from the current 37.5%, among other changes.
But as soon as the changes were announced, government backtracked on its decision, announcing that the zero-rating of VAT on the export of raw materials would remain in place, while the 37.5% corporate tax rate would be maintained in conjunction with a formula-based surcharge to capture additional mining revenue during better economic periods. The plan to introduce a levy system would also remain in place, but not at a 5% rate.