SINKAMBA RULES GOVT OFFSIDE ON TAX RELIEF TO MINES
GIVING the mining companies a further relief in taxation is a loss of revenue because the theory that it will spur investments cannot hold and as such we can only say that Zambians are the losers in the 2023 national budget, Green party president, Peter Sinkamba has said.
In an interview, Mr. Sinkamba lamented that the nation has been losing huge amounts of money that would have come from prudent taxation such as mineral royalty tax.
He said that this is the only tax that Zambia can be assured of. He claimed that all the mining companies apart from First Quantum Minerals (FQM) have been declaring losses for the past 22 years, a thing that was worrying.
Mr. Sinkamba, who has participated in various mining strategic undertakings in
Zambia and the continent insisted that giving mining companies’ tax relief has never developed the mining sector of any country in the region.
He said countries like the Democratic Republic of Congo (DRC), Zimbabwe, Botswana and even Tanzania had very high mineral royalty tax regimes and yet they had more investment.
He therefore wondered the basis of the theory that the Zambian government was busy preaching and explaining in different fora.
According to Mr. Sinkamba, the government and the Minister of Finance and National Planning in particular were not basing their decision on empirical evidence in this matter.
He insisted that the government needs to objectively look at this matter as it is depriving Zambians of the benefits from the mines.
Mr. Sinkamba said that the mining sector being the greatest contributor to the nation’s GDP must not be left to gambling decisions, but must be guided by research informed decisions.
He emphasised that to forgo the mineral royalty tax on the assumption that it would trigger more investment had no basis. He argued that any firm knows that mining was costly and tax was part of that cost that must be factored into such an undertaking.
Mr. Sinkamba therefore saw no good reason to continue pampering the mining firms at the expense of the much needed revenue which would reduce the government’s appetite for debt.