Zambia not raising mining tax

ZAMBIA, Africa's top copper producer, said on Monday it would maintain existing mining taxes despite growing internal pressure on authorities to raise them in 2010 following a rally in metal prices.

ZAMBIA, Africa's top copper producer, said on Monday it would maintain existing mining taxes despite growing internal pressure on authorities to raise them in 2010 following a rally in metal prices.

Chief government spokesperson Ronnie Shikapwasha said Zambia would maintain the existing tax regime - introduced last year - as the global economy was just starting to recover from the recession.

The IMF and World Bank have said Zambia should further raise mining taxes and should not have abolished a 25percent mineral windfall tax this year.

"We need to allow the mines to develop and re-create employment, that is why we (provided) existing tax concessions. We may revisit the agreements in future as the mines pick up," Shikapwasha said.

Foreign-owned mining companies are currently expected to pay a 15percent profit variable tax, 30percent corporate tax and 3percent minerals royalty.

Senior lecturer at the University of Zambia, Mathias Mpande said the country should scrap the tax breaks to raise more revenue following a rally in metals prices.

"The colonial government used mining to create industrialisation elsewhere and we cannot continue mining in that pattern," Mpande said. - Reuters

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