THE MINES ARE NOT ON TAX HOLIDAYS: LET THE NUMBERS SPEAK
There is a dangerous lie spreading across Zambia at the speed of lightning that President Hakainde Hichilema has given mining companies tax holidays, that the mines are paying nothing, and that our copper is simply being taken out of the country for free. This claim is false. Social media has sadly become an altar of spreading lies, speculations, hatred and malice by the apostles of doom and gloom.
Mining companies in Zambia remain liable to Mineral Royalty Tax, 30% Company Income Tax on taxable mining profits, PAYE for their employees, withholding taxes, VAT obligations, customs duties and other statutory payments. The mining sector remains the biggest payer of tax revenues. A tax reform is not the same thing as a tax holiday, and making Mineral Royalty Tax deductible did not abolish Mineral Royalty Tax.
Mineral Royalty Tax is paid on the value of minerals extracted and sold, whether a mine makes a profit or not. Company Income Tax is then charged on taxable profit after legally permitted expenses and deductions. The mines are therefore not operating tax free. Kindly be guided.
In 2011, Mineral Royalty Tax on base metals was increased from 3% to 6%. In 2015, the PF Government introduced royalty rates of 8% for underground mines and an extremely high 20% for open cast mines. The regime was later changed again because of its effect on investment and mine viability.
Further changes followed in 2016, 2017 and 2019. From 2019, the PF Government made Mineral Royalty Tax non deductible when calculating Company Income Tax. This meant that a mine paid mineral royalty but could not recognise that payment as a cost before calculating its taxable profit. The mining industry described this as double taxation.
The UPND Government did not give mines a tax holiday. From January 2022, it restored Mineral Royalty Tax as a deductible expense for Company Income Tax purposes. The mines continued paying the royalty, but they were allowed to deduct what they had already paid before calculating taxable profit.
In 2023, the Government also changed the copper royalty bands so that the higher rate applies only to the portion of the copper price falling within that band. This removed the sudden tax “cliff” under which a small increase in the international copper price could push the entire value of production into a higher royalty bracket. These were measures designed to create a more predictable, competitive and stable mining tax regime, and not to exempt mines from taxation.
Let us now examine production. Zambia produced approximately 739,759 metric tonnes of copper in 2011. By 2021, after ten years of PF rule, production stood at approximately 800,696 metric tonnes, an increase of only about 61,000 tonnes over an entire decade. Production had actually fallen from approximately 837,996 tonnes in 2020.
Production declined further during the operational difficulties of 2022 and 2023, including the unresolved problems at Konkola Copper Mines and Mopani Copper Mines. It fell to about 763,000 tonnes in 2022 and approximately 732,583 tonnes in 2023, but after the Government resolved the long running difficulties at KCM and secured a strategic investor for Mopani, the direction began to change. Copper production recovered to approximately 820,676 tonnes in 2024, an increase of about 12% in one year. In 2025, production rose further to approximately 890,346 tonnes. These are not political campaign songs and slogans. These are production figures.
Investment has also returned to the sector. The announced and actualised projects include the recapitalisation of Mopani, the revival of KCM, First Quantum Minerals’ expansion at Kansanshi, Barrick’s expansion of Lumwana and new exploration and mine development projects. The Ministry of Mines reported consolidated mining investments of approximately US$9.3 billion from projects commencing in 2024, with additional pledges of about US$1 billion. The Government’s latest mining statistics place actualised investments at approximately US$10.38 billion.
Again, these are not tax holidays. They are investments in mine expansion, new equipment, processing facilities, exploration, employment and increased productive capacity.
What about Treasury revenue? In 2021, mining accounted for approximately 39% of total Government revenue according to the Zambia Extractive Industries Transparency Initiative. In 2022, after the supposed “tax holiday” had allegedly been introduced, the sector accounted for 44% of Government revenue.
The Zambia Revenue Authority further reports that mining companies continued paying both Mineral Royalty Tax and Mining Company Income Tax. In 2022, Mining Company Income Tax accounted for approximately 53.8% of core mining tax revenue, while Mineral Royalty Tax accounted for 46%. By 2025, Mining Company Income Tax alone contributed approximately K14.958 billion. That figure does not include all the other taxes and payments made by the mining sector.
How, then, can anyone honestly claim that the mines are paying nothing? There is legitimate room to debate whether Zambia is collecting the optimum amount from its mineral wealth. We must strengthen mineral production monitoring, transfer pricing enforcement, auditing of costs, local procurement, value addition and Zambian participation. We must ensure that every tonne extracted is properly recorded and every ngwee legally due is collected, but we must not build national policy on manufactured claims.
The UPND mining policy is clear, ie, establish a predictable fiscal regime, restore investor confidence, resolve distressed mining assets, attract capital, increase production, create jobs, support local suppliers and expand the tax base.
A mine that has closed pays no Mineral Royalty Tax, no Company Income Tax and employs no workers. A mine that is operating, expanding and profitable pays royalties, taxes, wages, suppliers and dividends.
The Government must respond more quickly and forcefully when lies of this magnitude are circulated. Silence creates space for misinformation to become accepted as truth.
The mines are not on a general tax holiday. They are paying taxes. Investment is returning. Production is recovering. The numbers are available, and the numbers do not lie.
Zambia Forward, TOGETHER in UNITY. 🇿🇲
Saviour Chishimba
President
United Progressive People (UPP)
UPND Alliance Partner