Mineral royalty tax changes welcomed

CHANGES to the mineral royalty tax as presented in the 2019 national budget is welcomed as it has positive and progressive pronouncement, the Association of Mine Suppliers and Contractors (AMSC), has said. AMSC president Augustine Mubanga said the changes would ensure that benefit in terms of tax collection was derived and that the people of Zambia benefitted from their resources. “The Association of Mine Suppliers and Contractors have welcomed the changes to the tax regime in the mining sector and noted the positive pronouncements made in the national budget. “We take note with happiness the changes to the mineral royalty tax by increasing 1.5 percent on each sliding band and the 10 percent rate that will trigger at $7, 500 and above,” Mr Mubanga said. He said the royalty tax changes was one of the positive and progressive changes worth noting. “Most notably is the increase from 5 percent to 8 percent of Cobalt MRT. However, we think that Govt could have done more on this tax, considering the fact that cobalt pricing has not changed in a long time and an adjustment of 10-15 percent was going to ensure that maximum revenue collection is achieved,” he said. Mr Mubanga urged the mining houses to support the move especially that in the last 3-4years Government had ensured that the sector stabilizes from world economic stress of 2008, 2014 and 2015 by maintaining a constant tax regime. He hoped that the mine houses would not use the increase as an excuse to deny Zambians business. He further encouraged the mine houses to even do more in supporting local suppliers and contractors to access even more opportunities. Mr Musonda also said that as an advocate reforms in the mining sector, the association noted with great interest the proposed amendment to the mines and mineral development Act of 2015. “We 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 Govt can take advantage and increase its shareholding through ZCCM-IH,” he stated. He proposed that a regulated 40% of procurements in mining sector should be given to local Zambian owned supplier and contracting companies. And Mr Mubanga said the measure taken of increasing the penalty fee for transfer pricing to K24million was a welcome and commendable move, but that Zambians must be aware of the fact that prosecuting incidences of Transfer Pricing Crimes are very difficult.