The Association of Mine Suppliers and Contractors has welcomed the proposed tax changes in the mining Sector in the 2019 National Budget saying Zambians will benefit from their own mineral resources.
President Augustine Mubanga said the changes to the tax regime in the mining sector will add to Zambia’s economic growth.
He said the changes to the mineral royalty tax by a 1.5% increase on each sliding band and the 10% rate that will trigger at $7,500 and above is a positive step.
“These changes will ensure benefits in the way tax collection is derived and ensure that the people of Zambia benefit from their resources. Most notably is the increase from 5% to 8% of Cobalt MRT, However, we think that government could have done more on this tax, considering the fact that cobalt MRT has not changed in a long time, a fair adjustment of 10-15% was going to ensure that maximum revenue collection is achieved,” he stated
Mubanga has since urged mining houses to support the changes especially that in the last four years government had ensured that the sector stabilizes from world economic stress of 2008, 2014 and 2015 by maintaining a constant tax regime.
He has appealed to mining firms not use the proposed changes as an excuse to deny Zambians business.
“We further encourage these mine houses to do more in supporting local suppliers and contractors to access even more opportunities. We also feel that reforms such as mandatory listing of the Mines at LUSE will provide an opportunity to Zambians to own shares and participate directly into the running of the mines, and also government can take advantage and increase its shareholding through ZCCM-IH,” he said.
Mubanga has further proposed that a regulated 40% of procurements in the mining sector be given to Zambians owned supplier and contracting companies.
“The mining sector spends between US$3billion to US$4.5 billion annually this includes CAPEX, If 40% is captured it will increase economic activities thereby increase contribution to the GDP and employment. The Mines have taken advantage of this gap to procure 80-90% of goods and services from outside,” Mubanga said.
Source: Zambia Reports