Business

MUZ hopeful State will resolve mining tax issue

ESTHER MSETEKA, Lusaka
THE Mine Workers Union of Zambia (MUZ) is optimistic that Government and the mining companies will resolve the value added tax (VAT) General Rule 18 to boost investment in the sector.
Newly-elected MUZ president Chishimba Nkole said there is no doubt that Government and the mining firms will amicably resolve all the pending issues in the mining sector, including Rule 18.
“MUZ expects that there will be fruitful dialogue between Government and the mining companies to resolve the VAT General Rule 18 that has seen more than US$600 million [US$1billion by December 2014] belonging to mining companies not being paid and leading to the retrenchment of 179 mine workers at Sable Zinc in Kabwe.
Last year, the Zambia Revenue Authority (ZRA) withheld K4 billion VAT refunds on account of tax-payers not submitting necessary documents in accordance with Rule 18.
Mr Nkole said in response to query on Wednesday that the postponement of major capital projects in the mining sector due to the mining tax regime could impact negatively on the economy while over 12,000 direct jobs could be lost.
He said if not properly handled, the unrest will result in reduced revenues coming from the mining industry in terms of corporate, royalty and pay-as-you-earn taxes with communities in the Copperbelt and North-Western provinces being the most hit.
“We are also hopeful that the issues surrounding the new mine tax regime in this year’s budget will be resolved amicably, as some companies such as Lumwana which employees over 4,000 workers, have already threatened to close operations,” he said.
Mr Nkole also praised Government efforts for ensuring that mining companies adhere to environmental regulations by Zambia Environmental Management Agency.

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