Even after legislation has been introduced in Parliament, the mining companies are still hoping to avoid Zambia's new tax regime. Mining MX carries an interview with Charles Needha, CEO of Metorex, owners of the Chibuluma mine.
Needham said the government had taken every revenue stream generated by the mines and raised it, which would double Metorex’s tax rate to about 40%. “We looked at the affect of what they are proposing on our tax rate and it more than doubles it, which is unacceptable to us,” Needham said. Metorex will not close its Chibuluma copper mine if the new regime is implemented. Metorex signed its 15-year development agreement, with a tax stabilisation clause, in 1997 when copper prices were far less favourable than today. “We are protected by international law,” he said. A senior foreign mining executive told Miningmx in Zambia earlier in February that international arbitration was an option if the government pressed ahead with the fiscal changes. Metorex believes the government is open to negotiation on the rates and together with other mining companies in Zambia will offer to pay a variable tax rate at various copper prices and suggest that companies would like to see money from those taxes flowing into communities around the mines. “The mining industry in general opposes what’s happening. The government understands there are development agreements that protect a lot of companies… and if this were implemented there are a number of new operations that will not come on line,” Needham said. “This process is not good for the nation or for the people, but we believe through negotiations, this will be adjusted.”
1 comment:
Unless I am very much mistaken, but because these agreements are supposed to be 'secret', they were never run by Parliament, which is in direct contravention of Article 100 of the Zambian constitution (1991):
Article 100 [Imposition of taxation]
(1) Subject to the provisions of this Article, no taxation shall be imposed or altered except by or under an Act of Parliament.
(2) Except as provided by clauses (3) and (4), Parliament shall not confer upon any other person or authority power to impose or to alter, otherwise than by reduction, any taxation.
(3) Parliament may make provision under which the President or the Vice-President or a Minister may by order provide that, on or after the publication of a bill being a bill approved by the President that it is proposed to introduce into the National Assembly and providing for the imposition or alteration of taxation, such provisions of the bill as may be specified in the order shall, have the force of law for such and subject to such conditions as may be prescribed by Parliament: Provided that any such order shall, unless sooner revoked, case to have effect --
(i) if the bill to which it relates is not passed within such period from the date of its first reading in the National Assembly as may be prescribed by Parliament;
(ii) if, after the introduction of the bill to which it relates, Parliament is prorogued or the National Assembly is dissolved;
(iii) if, after the passage of the bill to which it relates the President refuses his assent thereto; or
(iv) at the expiration of a period of four months from the date on which it came into operation or such longer period from the date as may be specified in any resolution passed by the National Assembly after the bill to which it relates has been introduced.
(4) Parliament may confer upon any authority established by law for the purposes of local government power to impose taxation within the area for which that authority is established and to alter taxation so imposed.
(5) Where the Appropriation Act in respect of a financial year has not come into force at the expiration of six months from the commencement of that financial year, the operation of any law relating to the collection or recovery of any tax upon any income or profits or any duty or customs or excise shall be suspended until that Act comes into force: Provided that --
(i) in any financial year in which the National Assembly stands dissolved at the commencement of that year the period of six months shall begin from the day upon which the National Assembly first sits following that dissolution instead of from the commencement of the financial year;
(ii) the provisions of this clause shall not apply in any financial year in which the National Assembly is dissolved after the laying of estimates in accordance with Article 103 and before the Appropriation bill relating to those estimates is passed by Parliament.
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