The cabinet of Zambia has approved changes in the mining tax regime to reduce the royalty tax rate to 9%.
The previous government of deceased President Michael Sata increased in January 2015 mining royalty tax from 6% to 20%.
The consequent sharp increase in cost of doing business resulted in several mining companies threatening to suspend their operations in Zambia with a significant impact on jobs, inward investment and reduced government revenues, indicates Zambia Chambers of Mines.
Newly elected President Edgar Lungu commitment to solve the problem, lead to the new cabinet to approve a revised mineral royalty tax rate for open cast mining and underground mining operations of 9%.
Zambia is Africa’s largest producer of Copper and Cobalt. The mining sector of Zambia has attracted investment above USD 8 billion since 2000 creating over 80,000 jobs by 2013.
It is projected that investments in the mining sector will reach approximately USD 15 billion on account of new projects under implementation and/or exploration by the year 2017 as per Zambia Development Agency (ZDA).