Zambia is on course to collect a projected $415 million from new mining taxes in 2008 following compliance by mining companies, a senior tax official said on Thursday, contradicting a top treasury official.
The new tax regime, which came into effect on April 1, increased mineral royalty to 3 percent from 0.6 percent, while corporate tax on miners rose to 30 percent from 25 percent.
Zambia also introduced a 15 percent variable profit tax on taxable income above 8 percent and a minimum of 25 percent windfall profit tax.
Zambia Revenue Authority (ZRA) commissioner-general Chriticles Mwansa said in a statement mining companies had complied with the new tax law and paid the mineral royalties at 3 percent.
Mwansa said mining companies paid the tax authority $8.4 million in May compared with the $1.4 million that they used to pay per month before the introduction of the new taxes.
I am confident that the targeted $415 million will be collected. The compliance levels so far by the mining companies are very encouraging, hence we are extremely hopeful that the government will meet the target.
The first payments for mineral royalty were due on May 14, 2008 following the introduction of new taxes but the bulk of the revenue will be paid in June when the first returns and payments for company income tax and other taxes are due, Mwansa said.
Emmanuel Ngulube, permanent secretary in the Ministry of Finance, said on Monday the first money of the projected $415 million this year would start coming in June, and that a power outage would affect mine production.
Ngulube said he therefore expected the revenue to reduce.
Finance Minister Ng'andu Magande said on Wednesday Zambia was on course to achieve a targeted 1.0 million tonnes of refined copper in three years after resolving a controversy over new mining taxes with foreign investors,
Magande said all but two foreign mining firms in mineral-rich Zambia had agreed to pay the increased taxes, after initial threats of litigation in international courts.
The bigger tax bite had outraged mining firms, which said the move could discourage investment in the sector, a major employer in Zambia accounting for a large share of foreign earnings.
Konkola Copper Mines, a unit of London-listed Vedanta Resources Plc
(Reporting by Chris Mfula; editing by Christopher Johnson)
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