Cho writes compellingly on his Zambian Economist blog about ongoing negotiations in the implementation of the windfall taxes. It looks like absolute chaos! I reproduce the whole thing here to save myself time:
"The Daily Mail reports on the puzzling world of the new fiscal regime. The long running saga between the state and the mining companies continues, with the latest announcement that the government has deferred the collection of the 25% windfall tax from mining companies until the discussions which have commenced between the two parties are completed. A negotiable fiscal regime, now that must be a first! Well may be not a first, after all this is how the MFEZs have been implemented - through negotiations, just like good-old-now-discreted-DAs ( no public inquiry into how those were signed yet). Perhaps now is the time for the government to level with the Zambian people and reveal just how they arrived at the new tax thresholds? When is this government going to release the report from "foreign mining experts" they hired to advise us on the fiscal regime, at great cost to the tax payer ? (its been one u-turn after the next, ever since this regime was implemented - see here & here). Excerpt:
Mr Chibiliti said only two mining companies had so far paid the 25 per cent windfall tax out of the total number of mining companies operating in Zambia. “The mining companies made presentations to the late President Mwanawasa on the windfall tax and he asked Minister of Finance and National Planning Ng’andu Magande to review it so we have deferred the windfall tax until a proper assessment is done by the Zambia Revenue Authority,” he said.
Mr Chibiliti, however, said the deferring of the windfall did not mean that Government had cancelled what the mining companies owed the State. He said ZRA would treat mining companies that have not yet paid the tax as defaulters until a comprehensive report was compiled by ZRA. “The mining companies have cited failure to pay windfall tax to high production costs and as Government we are mindful of the impact the high production costs have had on the growth of the mines. This is the reason we have engaged them into dialogue,” Mr Chibiliti said.
He said the three thresholds at which Government had calculated the collection of windfall tax had increased three times than earlier expected thereby causing difficulties to the growth of the mine sector in the country."
"The Daily Mail reports on the puzzling world of the new fiscal regime. The long running saga between the state and the mining companies continues, with the latest announcement that the government has deferred the collection of the 25% windfall tax from mining companies until the discussions which have commenced between the two parties are completed. A negotiable fiscal regime, now that must be a first! Well may be not a first, after all this is how the MFEZs have been implemented - through negotiations, just like good-old-now-discreted-DAs ( no public inquiry into how those were signed yet). Perhaps now is the time for the government to level with the Zambian people and reveal just how they arrived at the new tax thresholds? When is this government going to release the report from "foreign mining experts" they hired to advise us on the fiscal regime, at great cost to the tax payer ? (its been one u-turn after the next, ever since this regime was implemented - see here & here). Excerpt:
Mr Chibiliti said only two mining companies had so far paid the 25 per cent windfall tax out of the total number of mining companies operating in Zambia. “The mining companies made presentations to the late President Mwanawasa on the windfall tax and he asked Minister of Finance and National Planning Ng’andu Magande to review it so we have deferred the windfall tax until a proper assessment is done by the Zambia Revenue Authority,” he said.
Mr Chibiliti, however, said the deferring of the windfall did not mean that Government had cancelled what the mining companies owed the State. He said ZRA would treat mining companies that have not yet paid the tax as defaulters until a comprehensive report was compiled by ZRA. “The mining companies have cited failure to pay windfall tax to high production costs and as Government we are mindful of the impact the high production costs have had on the growth of the mines. This is the reason we have engaged them into dialogue,” Mr Chibiliti said.
He said the three thresholds at which Government had calculated the collection of windfall tax had increased three times than earlier expected thereby causing difficulties to the growth of the mine sector in the country."
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