Zambia not consider higher mining taxes - Mr Maxwell Mwale

Friday, 14 May 2010
Reuters reported that Zambia will not reintroduce the controversial mining windfall tax it scrapped in 2009 when copper prices rose sharply, despite pressure from opposition parties to do so.

The introduction of 25% windfall tax and other taxes in 2008 was backed by the World Bank to help Zambia raise funds required to build schools, roads and provide health and education services in the poor southern African country.

Mr Maxwell Mwale mines minister of Zambia said that although countries like Australia had introduced a tax similar to windfall tax, Zambia would not do so and he hoped investors leaving Australia would explore mining opportunities in Africa's top copper producer. Those calling for the reintroduction of windfall tax do not know what it takes to run a government.

He said that in 2008 when we imposed windfall tax we saw a decline in mineral exploration and we don't want that to happen, we need to attract investors.

Mr Kwalela Lamaswala resident director of First Quantum said that the windfall tax raised production costs for mining companies and that scared away investors. The windfall tax was a very retrogressive tax and we are very happy the government has realized this.

Mr Michael Sata Zambia's main opposition leader said that the country was forfeiting revenue after the tax was scrapped. The MMD government should listen to the cry of the people of Zambia and reintroduce the tax for the benefit of the country. We need the revenue to improve the lives of the Zambian people.

(Sourced from Reuters)