CHAMBER OF MINES SPEAK AGAINST WINDFALL TAX

The Chamber of Mines says calls to re-introduce windfall tax in the mining sector will not help Zambia’s economic growth but will instead strain operations of the mines.
Association Chief Executive Officer, Fred Bantubonse says windfall tax is not in the best interest of either Government or mining companies as the re- introduction of the tax will shrink the mining industry.

Windfall tax is a higher tax rate on profits that ensue from a sudden windfall gain to a particular company or industry.

Mr Bantubonse has said Zambia needs taxes that guarantee benefits for both Government and investors and not ones that choked the much-needed investment.
He also said taxing mining firms based on the profits could scare away investors who have invested heavily, created direct and indirectly jobs for Zambians, and are already paying variable tax.

Mr Bantubonse has argued that the variable income tax system ensures that income from all the profit above normal is collected but the system spares companies from being taxed on their normal revenue.
He said for any tax to be acceptable, it must allow investment to grow and business to be sustained.

Mr Bantubonse further said what Zambia needs is a win-win situation and not a condition that would kill the industry.

The windfall tax was introduced by Government in 2008 and later revised to variable income tax.

The former Government constantly cautioned against attempts to recall the windfall tax for mining companies to avoid a leap towards economic destruction and that a lack of understanding between tax systems could also collapse the economy.

Recently, Mines Minister, Wilbur Simuusa said the PF government will revisit the issue of windfall tax with full consultation of stakeholders to have a win-win situation.