TAX JUSTICE DENIED: ZAMBIA’S MINERALS ENRICHING CORPORATIONS, NOT CITIZENS

TAX JUSTICE DENIED: ZAMBIA’S MINERALS ENRICHING CORPORATIONS, NOT CITIZENS
The decision by Zambia’s Minister of Finance and National Planning, Dr. Situmbeko Musokotwane, to scrap export taxes on copper concentrates through Statutory Instrument No. 47 of 2025 has sparked renewed public outrage and raised serious concerns about the government’s development priorities.

The removal of these levies directly benefits major mining firms, Mopani, Lumwana, First Quantum Minerals, and others, allowing them to export raw copper concentrates without any obligation to support local processing, job creation, or industrial development. Export taxes have historically encouraged domestic beneficiation, secured employment, and retained valuable by-products like gold and rare earths. By reversing this policy, the government has effectively sidelined these objectives in favor of private profits.

This move is not new. In 2008, Dr. Musokotwane scrapped the Windfall Tax, which had earned Zambia over $500 million in a single year. In 2021, the UPND-led government eliminated the non-deductible Mineral Royalty Tax, which was generating over $1 billion annually. These decisions expose a persistent pattern: weakening fiscal tools meant to hold multinational miners accountable while shifting the tax burden onto ordinary Zambians.

Compounding this issue is the little-publicized but deeply controversial VAT refund scheme, through which mining companies have systematically reclaimed billions of kwacha in value-added tax (VAT)—often for goods and services never processed or consumed within Zambia. For example, between 2013 and 2018, mining firms claimed over $1.2 billion in VAT refunds, according to estimates from the Zambia Revenue Authority (ZRA) and civil society watchdogs. These refunds are premised on the principle that exports are zero-rated under VAT law. However, the scale and opacity of the refund process have opened the door to aggressive accounting practices, invoice manipulation, and in some cases, fraudulent claims.

The most glaring example of bias came when First Quantum Minerals was allowed to settle a $1 billion tax dispute with the Zambia Revenue Authority (ZRA) for just $23 million, a mere 3% of what was owed. Yet, the ZRA aggressively pursues Zambian farmers, traders, and SMEs over far smaller liabilities. This double standard in tax enforcement underscores the system’s unjust tilt toward foreign interests

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The same pattern exists in the energy sector. Instead of investing in renewables or refining capacity, the government relies on opaque import contracts and bloated procurement schemes. Fuel shortages, erratic electricity, and rising prices persist, while Independent Power Producers (IPPs) enjoy lucrative, guaranteed payments. Citizens, however, are left paying soaring electricity tariffs.

All of this reflects a deeper policy failure: the state repeatedly prioritizes corporate appeasement over public welfare. While multinational firms enjoy tax holidays, refunds, and settlements, citizens carry the burden through PAYE, VAT, fuel levies, and utility surcharges. The result is a regressive fiscal structure where the poor subsidize the rich.

If Zambia is to break free from this cycle of underdevelopment, its leaders must reclaim fiscal sovereignty and demand accountability, especially from the powerful mining and energy sectors. Tax justice should not be a slogan; it must become a national policy imperative. Until then, Zambia’s mineral wealth will continue to enrich corporations, not citizens.

The Struggle Continues
Sensio Banda
Former Member of Parliament
Kasenengwa Constituency
Eastern Province