LUSAKA, Dec. 11 (Xinhua) -- Mining firms in Zambia are reviewing their operations and considering scaling back substantially following the decision by the government to introduce a new mine tax regime, an industry body said on Tuesday.
The Zambia Chamber of Mines said the move could see a reduction in capital expenditure by over half a billion U.S. dollars over the next three years and consequently a reduction of over 7,000 direct jobs and more than double the number of indirect jobs.
"While feedback on our representations to the Ministry of Finance is awaited, the membership remains hopeful of averting such an outcome and are strongly committed to robust engagement above and beyond the process outlined by the minister in which the reconstitution of the Tax Policy Review Committee was announced," Goodwell Mateyo, the new president of the mining body said in a release.
In the 2019 budget, the government announced a new tax regime which comes into effect on January 1.
The government intends to increase mineral royalty rates by 1.5 percentage points at all levels of the sliding scale as well as introduce a fourth tier rate at 10 percent on the sliding mineral royalty regime which would apply when copper prices rise beyond 7,500 dollars per ton.
The announcement has brought consternation, forcing the finance minister to institute a team aimed at reviewing the tax regime.