Zambia’s plan to increase mining royalties will break the back of the economy in Africa’s second-biggest copper producer and make investment there impossible, an industry lobby group said.
Responding to plans Finance Minister Margaret Mwanakatwe unveiled last week to increase royalties by 1.5 percentage points while introducing additional charges for metal exports and imports, the Zambia Chamber of Mines said the measures would “lead to famine.”
“Let us be clear, these higher tax rates will not result in more tax revenue,” Nathan Chishimba, president of the lobby group, said Wednesday in an emailed statement. “As industry production shrinks through the impact, there will be less jobs, less taxes and as a result there will be less in the government’s bank account for many years to come.”
Members of the group include Glencore Plc, Barrick Gold Corp. and Vedanta Resources Plc. First Quantum Minerals Plc, which produces more than half of Zambia’s copper, is also part of the chamber.
Mwanakatwe’s tax increases for copper producers come as the government tries to finance a gaping budget deficit amid rapidly rising external debt.
For the rest of this article: https://www.bloomberg.com/news/articles/2018-10-03/zambia-chamber-of-mines-says-taxes-make-zambia-uninvestable