Govt to lose $140m mine revenue

GOVERNMENT will this year not be able to collect US $140 million revenue from the mining sector due to the 2019 tax change, Zambia Chamber of Mines president Goodwell Mateyo has said.

The state would have collected US $585 million revenue from the mining sector if it had maintained the 2018 mining tax regime.

"Copper production for this may drop lower than 750, 000 due to the 2019 tax regime which has made the industry to face more challenges.

"In terms of revenue collection, Government will only be able to collect US $445 million from the mining sector this year, but if had continued with the 2018 tax regime, it could have collected US $585 million," Mr Mateyo said.

The 2019 tax regime, he said, would lead to Zambia dropping out of being among the top 10 mining producers in the world. Mr Mateyo also emphasised that Government should not introduce sales tax as it would have an effect on the local value chain. He explained that long supply chains would be particularly badly hit, and the perverse incentives created by the tax would disadvantage local Zambian businesses that use or distribute imported goods.

Mr Mateyo said the inevitable consequence of implementing sales tax would be fewer business opportunities, more business closures, and job losses.

"As prices increase across the board, the purchasing power of salaries will be reduced – a phenomenon known as salary erosion," Mr Mateyo said.