GOVT WOES MINING INVESTORS
….Zambia has restructured the Mineral Royalty tax regime to align with international good practice
Lusaka… Wednesday April 26, 2023 (SMART EAGLES)
Minister of Finance and National Planning Dr. Situmbeko Musokotwane has called on investors to invest in the mining sector to increase exploration and develop green field projects.
D. Musokotwane says such move will indeed support Government’s strategy to diversify within the mining sector; and will increase the country’s net foreign earning apart from improving the living standards of the surrounding communities and the whole nation.
He says to encourage investment in the sector, Government has restructured the Mineral Royalty tax regime to align with international good practice and in the effort to make the sector more attractive for investment.
The Finance and National Planning Minister said this at the inaugural Zambia Institutional Investors Forum 2023 at Ciela Resort and Spa in Lusaka.
“The mineral royalty is also deductible for corporate income tax purposes; and the Property Transfer Tax rate on the transfer of mining rights held by exploration companies has also been reduced. Zambia has mineral endowment that remains untapped. Apart from copper, there are other minerals such as Gold, Zinc, Lead, Iron Ore, Manganese, Nickel, Feldspar, sands, Talc, Barite, Apatite, Limestone, Dolomite and Uranium among others,” he said.
“In the agricultural sector, Government wishes to expand the production capacity of the sector and promote economic diversification, sustainability and create employment opportunities. Given that Zambia is endowed with a large arable land resource base of 42 million hectares, a lot of opportunities exist for crop farming and breeding of livestock. The country is also endowed with large freshwater bodies that can support irrigation and aquaculture including cage fish farming.”
Dr. Musokotwane indicated that government has already provided incentives to the agricultural sector adding that these include lower corporate income tax rates in the agricultural sector; suspension of customs duty on machinery, equipment and other goods; and zero-rated Value Added Tax (VAT) rate for most agricultural products.
“Tourism: There are various opportunities in the tourism sector ranging from the establishment of hotels to the development of recreational facilities. Government focus in this regard, is on developing the enabling infrastructure that will unlock opportunities for investment and support to surrounding communities. Specifically, we are in the process of securing resources to develop prerequisite infrastructure at Kasaba Bay, Liuwa and the source of the Zambezi river that will attract private sector investment into these areas,” he added.
“Some of the incentives provided by the Government include the suspension of customs duty on the importation of safari vehicles and reduced corporate tax rate from 25 percent to 15 percent in the sector. Government is also working on a number of measures to reduce the cost of doing business in the sector.”
As for the Manufacturing sector, Dr. Musokotwane stated that government aims to expand the manufacturing base by promoting value addition in the country.
“One key strategy is the use of Multi-Facility Economic Zones and industrial parks. The Zones and industrial parks come with a range of tax incentives for companies that are established in these designated areas,” he concluded.
“Energy: Government recognises the critical role the energy sector plays as an enabler of economic development. Given the growing demand for energy due to increased economic activities in the various sectors, the sector is much a priority. To increase electricity generation, a key policy reform is to make tariffs cost reflective to attract investment into the sector.”