Zambia Drops Cancels Hike to Mining Taxes

March 26, 2015 Taxation in Zambia

Mine in ZambiaLUSAKA – Mine operators in Zambia will soon have a temporary reprieve from a recent tax hike, as the government looks for more amicable solution to balance the need for tax revenues and the interest of the mining sector.

On March 25th the President of Zambia Edgar Lungu announced that the government will drop the recently implemented hikes to mineral royalty taxes, following months of negotiations and protest from mineral extractors operating in the country.

Late last year the government announced that mining companies would no longer be required to pay income taxes, however, the measure would be replaced with a hike in royalties, with the rate for open-cast mines rising from 6 percent to 20 percent, and the rate for underground mines rising from 6 percent to 8 percent.

However, the rise in the rate of royalties was met with almost immediate opposition from mine operators, who claimed that the tax burden was too high, especially in the face of the highly fluctuating demand for copper around the world.

Following lengthy negotiations, the President has now announced that the taxes faced by mining operators shall be temporarily reverted back, while the government continues it negotiations with mine operators, in order to find more amicable solution.

Photo By: AndreasS