PRESIDENT Edgar Lungu has directed the Minister of Finance Alexander Chikwanda and Minister of Mines and Minerals Development Christopher Yaluma to effect changes to the 2015 mineral royalty tax by April 8, 2015.
In letters submitted to the two ministers yesterday, President Lungu said after receiving submissions from individual mining companies and the Chamber of Mines, he has noted that the new tax regime posed a challenge to some mining houses.
President Lungu said some mines were high-cost while others were low-cost operations, and therefore the two ministers should consider the status quo and negotiate interim fiscal arrangements for operations that were most affected on a case-by-case basis.
The ministers had been further asked to identify potential legal or regulatory modifications to the existing 2015 fiscal regime that could be readily passed and implemented, defer implementation of the 2015 fiscal regime, and temporarily reinstate the 2014 fiscal regime as a more amicable regime was negotiated.
“Obviously the mining industry has been affected by copper prices on the international market. It is clear that this unfavourable economic trend globally has been mainly on account of weak global demand for copper. I wish to take this opportunity to reiterate my Government’s resolve to continue putting dialogue at the centre of our governance systems,” he said.
The President said the dialogue between the Government and the mines shall continue, and that the Government would always be amenable to progressive ideas that would assist in addressing challenges in the mining sector.
Mr Lungu said the challenges facing the mining sector could not be resolved overnight but that he was confident that the matters were not insurmountable.
“I have therefore directed the Minister of Finance and the Minister of Mines, Energy and Water Development to review the mining tax regime and make recommendations to Cabinet by 8th April 2015,” the President directed.
He said the ministers should also use the current legislation and administrative procedures to ensure that mines that were facing severe challenges were assisted.
President Lungu has since called on all individuals and corporate citizens to comply with the existing tax laws.
This is according to the statement availed to the Daily Nation by the President’s special assistant Amos Chanda.