LUSAKA (Monday, April 20, 2015) — At its 7th Special Meeting
held this morning, Cabinet deliberated on the proposals to revise the 2015
taxation regime for the mining sector. Cabinet approved the following measures:
i.
Mineral royalty tax rate for open cast mining and
underground mining operations will be pegged at 9 percent;
ii.
Corporate income tax on income earned from
mining operations will be 30 percent;
iii.
Corporate income tax on income earned from
mineral processing will be 35 percent;
iv.
Variable profit tax on income earned from mining
operations will be 15 percent when taxable income exceeds 8 percent of the
gross sales; and
v.
Deduction of tax losses carried forward to be
limited to 50 percent of taxable profits;
vi.
Stiffening of penalties for tax offenders; and
vii. Zambia Revenue Authority will introduce stringent enforcement mechanisms
to effectively monitor mining activities and ensure greater transparency among
mining companies when reporting revenue and expenditure.
In order to implement today’s
Cabinet decision, Government will undertake all the necessary administrative
and legislative measures rapidly. Once the Bill has been approved by
Parliament, the effective implementation date will be 1st July 2015 so that
there is a logical sequencing in the merging of two tax regimes in one fiscal
year. Cabinet has stressed that the approved mining taxation regime will bring
about the desired stability, predictability, consistency and transparency in
the mining sector. Government is planning to link mining taxation to the Medium
Term Expenditure Framework to ensure greater stability and predictability in
the sector.
And Cabinet deliberated on the
unfortunate situation regarding the outbreak of xenophobic violence in South
Africa. Following last week’s Press Release on the regrettable xenophobic
violence in the Republic of South Africa, the Government of the Republic of
Zambia would like to reassure the public that the welfare of Zambian nationals
living in, and travelling to the Republic of South Africa remains one of top
priority during this period.
The Zambian Mission in Pretoria
continues to closely monitor the situation in South Africa and to date, no
Zambian national living in South Africa has been reported to have been victim
of these unfortunate attacks. The Zambian public is therefore assured that
Government, through the Zambian High Commission in Pretoria, will continue to
maintain high vigil on the state of affairs in South Africa, which is a matter
of great concern to all members of the SADC region, and the continent as a
whole.
To this effect, His Excellency
President Edgar Chagwa Lungu has continued to consult with His Excellency
President Robert G. Mugabe, in his capacity as the Chairperson of both SADC and
AU as well as the leadership of the Government of the Republic of South Africa.
Zambia is confident that the intervention under the leadership of President
Jacob Zuma will soon bring the attacks to an end. Once again, all Zambians
living in South Africa have been reminded to exercise caution in their daily
activities and to continue to avoid those areas that are affected by xenophobic
attacks
