Zambia: Mines Ask for Relief On Investment
Posted on : Saturday , 19th September 2015
THE Zambia Chamber of Mines (ZCM) recommends that deduction of capital allowances for the mining industry should be reverted to 100 per cent on total capital expenditure per annum.
ZCM president Nathan Chishimba said in submissions for the 2016 National budget that most mining expansion projects were long term in nature and that it was important to give relief during that period of investment.
"For example sinking a shaft takes three to four years. It is important to give relief during that period of investment.
Even after commissioning a shaft, it will take another three years to ramp up to full production," he stated.
He said the current rates of 30 and 35 per cent on income earned from mining and process respectively were negatively affecting operations.
"The increase in corporate tax on processing will not encourage smelters to be processing concentrates. This does not tie in with Government's desire to encourage value addition within the country.
In addition, there will be administrative complications the distribution of taxable expenses. Therefore, the CIT rate for the industry must be set at 30," he stated.
Mr Chishimba said mining companies wants the exemption of import Value Added Tax (VAT) on copper concentrate imported into Zambia and that which is produced locally.
He stated ZCM wants a reduction of duty on fuel considering the prevailing energy crisis and the removal of 25 per cent excise duty on export of spent anodes to save energy for recycling.
"Rule 18(b) of the VAT regulations should be streamlined to provide for proof of export documents up to the point of exit from Zambia. Once goods leave the border, they cease to be the responsibility of the exporter," he said.
Mr Chishimba said ZCM maintains that Government should apply a single Mineral Royalty Tax rate for all mining operations considering the low metal price projected for the next 12 to 18 months.
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