Finance Minister announces changes to the mining tax system

In the recent 2015 budget speech last Friday, Finance Minister Alexander Chikwanda announced said ,that the Government would increase underground mining royalties to 8% from 6% as part of an effort to revamp the industry’s tax system.

The new 30% corporate processing and smelting tax introduced aims to maximise revenue collection at several stages of the production stream of the mineral resources

An extra 30% tax will be applied to income earned from “tolling”, industry-speak for an agreement to process another producers raw materials.

In addition to that a 20 percent mineral royalty will now apply on all open pit mining operations in the country as a final tax.

The tax system in the Zambian mining industry has been in the limelight due to the unresolved VAT refund issue with the tax authorities after the mining companies failed to furnish import certificates from destination countries.

Zambia Revenue Authorities has been withholding $600-million in VAT refunds owed to mining firms after.

The Finance Minister however said that iyt would like to see his Government resolve with issue with the mining companies amicably.

Mopani Mines has since threatened to halt mining expansion projects due to this unresolved VAT spat.

Source: Mining News Zambia

2016-06-17T16:19:30+00:00 October 13th, 2014|Industry|Comments Off on Finance Minister announces changes to the mining tax system