MINING companies have called on the Government to reinstate the 2014 fiscal regime on mine taxes while a more amicable regime is being negotiated.
Zambia Chamber of Mines (ZCM) president Jackson Sikamo said if reinstated the 2014 fiscal regime would encourage investment in the mining sector for sustainability of the industry and security of direct, indirect and induced jobs.
Mr Sikamo said the 2014 fiscal regime was predictable and stable to enable long term planning by the mine operators and potential new entrants in the industry.
Mr Sikamo said the 2014 fiscal regime increased revenue to the Government coffers for social and economic development on a sustainable basis contrary to the current 2015 fiscal regime.
“The 2014 fiscal regime encourages efficiency in the mines by optimizing cost profiles,” he said.
Mr Sikamo said the ZCM and its members were committed to working with all stakeholders to put in place a tax system that would increase revenue to the Government coffers.
“The 2014 fiscal regime was 6 percent mineral tax, 30 percent company tax and 15 percent valuable added tax,” he said.
In October 2014, Finance Minister Alexander Chikwanda proposed to redesign the mining fiscal regime by replacing the current two tier system with a simplified mining tax structure which saw an 8 percent mineral royalty for underground mining operations and 20 percent mineral royalty for open cast mining operations as a final tax.
Mr Sikamo said ZCM members were also committed to working with the Government to finding solutions that would allow them to sustain operations, project jobs, support local communities and contribute to Government revenue.
He said the mining industry represents more than 86 percent of Zambia’s Foreign Direct Investment, adding that such investment was critical for increased capacity and production levels in the mining industry, and was fundamental to the development of growing economies such as Zambia.
Mr Sikamo said ZCM has also noted that since President Lungu’s inception, he had been committed to fostering the sustainable operations of the mining companies.
He said President Lungu’s decision to guide the line ministries, including the Zambia Revenue Authority on Value Added Tax Rule 18 would help to continue contributing to job creation and poverty alleviation.