Foreign mining firms operating in Zambia on Saturday welcomed the government’s pronouncement to revise taxes in the sector, saying this was the first step towards transformation of the industry.
During the unveiling of the 2022 national budget on Friday, Finance and National Planning Minister Situmbeko Musokotwane said the government will reintroduce the deductibility of mineral royalty for corporate income tax assessment purposes in order to attract investment and boost production in the mining sector.
The government will, in the medium-term, amend the law so that mineral royalty determination reflects both international and aggregate norm values.
Godwin Beene, president of the Zambia Chamber of Mines, said the long-awaited removal of mineral royalty non-deductibility was the first step towards a mining-led recovery.
“That he (finance minister) has prioritized the urgently needed removal of the mineral royalty taxes non-deductibility, is a clear indication to the world that Zambia is once again open for business,” he said.
He said the world’s mining investors will now be looking at Zambia afresh, adding that this was required to achieve government’s aspirations to boost mining production.
The move, he said, could also lead to new mines in production over the next five to 10 years and eventually change the country’s development trajectory.
Africa’s second-largest copper producer has targeted to increase copper production from the current levels of around 800,000 tons per annum to 3 million tons per annum in the coming years.