THE reduction in mineral royalty taxes by Government will give confidence to investors in Zambia’s mining industry, says, an economist and financial analyst Maambo Hamaundu.
Mr Hamaundu said the reduced royalty taxes for the 2015 regime effective July 1 based on turnover will save mines that would have found it difficult to survive.
He said the action has saved a lot of jobs for many Zambians that would have been lost as a result of threats by investors to close the mines.
‘’This is a relief to the many Zambians employed in the mines because now their jobs are secured. The investors have more confidence and will in return pump more money in the industry knowing well that there is a future,’’ he said.
Mr Hamaundu said that the bold decision by Government was welcome and had given impetus to mining firms to re-think their earlier decision to cut on the number of employees.
He said Zambia’s economy could move to greater heights if more people were employed because taxes would still be realized through various taxation systems by Government.
And Mr Hamaundu has said there was no need to worry about loss of revenue by Government because the anticipated tax losses would still have occurred due to lack of production if investors had pulled out.
‘’These worries about loss of revenue by Government due to anticipated tax losses would still have occurred if the investors had pulled out. So really there is no need to cry over the same,’’ he said.
He said Zambia’s mining industry was expected to soar to greater heights now that the mines have been given an enabling environment to operate in. Meanwhile Mr Hamaundu has cautioned Government against over-spending by ensuring that it exercised hostility during budget implementation.
He said that the budget deficit experienced by Zambia in the last two years might continue due to lack of a proper restraint policy on Government expenditure.