MINES PROTEST TAX

ZAMBIA is loosing billions of Kwacha in Tax impasse between the government and the mining industry. Excess smelting capacity is going to waste because of a five percent tax impasse between government and the mines, the Daily Nation can reveal. The Zambia Chamber of Mines (ZCM) has protested the introduction of a five percent import duty on copper concentrates and has since proposed to Government to suspend it for four years. The Chamber has indicated that the move was uneconomical and not worth the cost of processing the commodity from the Democratic Republic of Congo (DRC). According to the submission made to the Ministry of Finance, ZCM proposed to Government to waive and then remove the five percent import duty for four years. “Industry respectfully proposes that the Government follow through on waiving and then removing the import duty on copper and cobalt concentrates. “Zambia has excess smelting capacity and will otherwise forfeit this capacity along with a large part of its associated freight business, and the jobs in both industries, to competitors in the DRC and neighbouring countries,” said the submission. ZCM said Government may consider reintroducing an import duty after the industry closed the gap on the excess smelting capacity through increased production of own-source concentrates. The Chamber said this was only possible within four years under this proposed framework. In an interview, ZCM president, Goodwell Mateyo, said the five percent was uneconomical and not worth the cost of processing the ore. Mr Mateyo said the five percent import on ore was too much for the mining industry. “There is no ban but there is a five percent import duty that was what the issue was which is uneconomical. Five percent it is not worth the cost of processing it. It is like electricity is available but if it is too expensive, no one will get it,” Mr Mateyo said. In a separate interview, Ministry of Finance Permanent Secretary in charge of Economic Management and Finance, Mukuli Chikuba, confirmed that the submission had been made by ZCM but unable to give the status of the submission as to whether the Ministry was considering waiving the five percent import duty or not. "Yes we have received the submission but I will have to check on how far it has gone," he said. In another interview, Zambia Revenue Authority (ZRA) Commissioner General, Kingsley Chanda, said any mining company was free to import the concentrates provided they paid taxes. Mr Chanda said the mining companies had made representation to the Ministry of Finance and to ZRA contending that they still needed the high grade concentrates from Congo because Zambia produced low grades. “The issue is that there is an argument as to whether we have the excess capacity or we do not have much capacity, or whether the concentrates that we locally have in Zambia is enough to feed our smelters. “So that has been in the argument for many years and to encourage local processing of locally produced material, Government imposed that tax on the imports, the customs duty,” Mr Chanda said.