The realignment of the provisions of Zambia Revenue Authority (ZRA) Rule 18 will ensure that mining companies and all exporters are not unduly encumbered by administrative rules and in the process affecting their cash flows and operations, Minister of Finance Alexander Chikwanda has said.
He said this when he presented a ministerial statement in Parliament yesterday on the new 2015 mining taxation regime.
Mr Chikwanda said Government had considered the submissions from the Zambia Chamber of Mines and had proceeded to realign the provisions of Rule 18.
He said the realignment of rule 18 was a clear demonstration of Government’s unfettered commitment to ensuring that regulations were not onerous but supportive to investment and business development.
“We are confident that mining companies will remain resolute in complying with tax rules. Rationality and efficacy demand that our solutions are duly balanced,” he said. Mr Chikwanda assured the nation that the Government was committed to ensuring that the tax system was not burdensome but conducive to tax compliance and beneficial to the country. He said Government remains open to dialogue and would welcome progressive ideas on matters relating to development of the country inclusive of those pertaining to taxation, adding that it would be within the spirit of partnership between investors and the Government.
Mr Chikwanda said despite Zambia being endowed with vast mineral resources, the country had not realised maximum benefits from the sector’s potential to support growth and enhanced socio economic development.
“This is against the backdrop that the sector has been experiencing high copper prices in the recent past. It is worth noting that the various changes in tax policies in the last 10 years with a view to optimise benefits from the mines have not yielded the desired results,” he said.
Mr Chikwanda revealed further that the contribution of the mining sector revenue as a percentage of GDP remained low at four percent.
“The contribution of the mining sector to the national budget has remained minimal even after the Government doubled the mineral royalty rate from 3 to 6 percent,” he said.
Mr Chikwanda said the PF Government was cognisant that its mineral wealth was non-replenishable.