Finance and national planning minister Situmbeko Musokotwane told parliament in a ministerial statement that this follows the finalization of the discussions between government and all the mining companies.
Dr Musokotwane says the discussion focused on the need for the mining companies to pay tax arrears arising from the changes that were introduced in 2008.
He says all the mining companies have agreed to pay the tax arrears.
He adds that it has also been agreed that the windfall tax arrears be reassessed at 25 percent to ensure that the assessed total liability does not exceed the 47 percent effective tax rate which was intended.
Dr Musokotwane says of the total tax arrears owed by the mining companies, government expects that K458.5 billion will be paid by the end of 2010, while the balance of K967.6 billion will be settled in 2011.
He says government will ensure that all arrears owed by the mining companies are paid by 30th June 2011.
Dr Musokotwane further disclosed that all the mining companies have agreed to start paying taxes based on the current tax regime.
And Dr Musokotwane says the design of the abolished windfall tax was defective and not consistent with international practice as it was based on taxing revenue.
He explains that the windfall tax did not take into account the cost of production.
QFM
He says the normal practice is to tax windfall profits as is the current practice for mining, banking and telecommunications.
I am not an economist but I know that you tax profits not revenue.
you can do more iwe , who is eating from the mines guys
First, revenues are taxed through the mineral royalties tax (it used to be 0.6%, now it is 3%).
Secondly, the Windfall Tax is a progressive tax. At no time are the mines taxed beyond the breakeven point of around $3,000 per tonne.
It is simply a tax on rising prices – which have nothing to do with increased costs.
This is what happens when you have dander heads in influential positions. Thick minister!! NO BRAINS and yet he is a doctor! My matako! Get rid of these people please zedians!!
# 4 What exactly are you saying?
This man qualifies to be the dullest finance minister in the world. He deserves to be recogniozed for this. What is a K1tr?
Why are we Africans only good at shouting from the roof tops. Zambian citizens are not procluded from buying and running the mines. Investors come in to HELP us to make use of our resources and all we do is abuse them. Why cant we run these things ourselves? The truth is NO black run country has been able to run a viable country. We have to sit back and work out why. Black people will always be consumers. Other people will produce EVERYTHING. Politicians make promises that they know the cant keep. It is just a way of getting their dirty hands on the money until someone else promises something else. African people are the most gullible people on earth.
Voice Of Reason,
Please keep your rhodie crap to yourself.
@ Voice of reason black people and Kingdoms civilized the world. We built Kemit now known as Egypt, Timbuktu where Arabs and Europeans came to get knowledge. Zimbazamabwe and the lost gold and mineral kingdoms that existed in ancient cape. We black people put Israel’s tribes into a judges and leadership theocracy. Read your history it’s in black and white read the bible it has the placements start at the beginning with genesis. After researching then make statements about failed modern leaders not black people you are you hating self.
MrK cannot stand the truth. I respect Mwanawakwitu says: The sad fact is as Africans we have not cordoned on to the fact that as Black people we are easily duped. We should have learnt after observing what is happening in nearly all African countries. People such as Sata come along and promise prosperity and good governance. If they keep on insulting the most solvent country in the world right now, China, where is the investment going to come from? All countries are vying for Chinese Investments. If we could run these mines ourselves we would. The fact is we cant.
Voice of reason # I agree with you one hundred percent on reading your second post. Modern Africans are easily duped. Zambians in droves are veiled by materialism and a false sense that what’s foreign is good for them always. Africans have lost their sense of person which should not be the case. 850 Million Africans are on the continent, that a market within. Build simple high quality products provide great services to the golden populace and we are on our way once more. Thanks for your clarification voice of reason you have let me share more on our people that have potential unlimited.
Same arrangement with Zambian Airways, Defered Payments but NyamaSoya, Dora, Shikapwasha and George Kunda sung on top of their voices that Magande, Mmembe and Nchito stole…… Atase. When a business transaction is made by those in power, it is ok. But if made by the opponents its treason or economic sabotage.
Foo..lish MMD.
jelousy among our pipo who dont want to work is another problem.we always think pipo who are wealth are coz of only being lucky or God blessing them…hard work is another if not the most important component of all wealth and rich pipo.It takes so many years to build a better life just to see a jelousy Zambian want to implicate u in useless acusations thats why rare talents cant be easily atrracted in leadership position but left overs.So please join the great force of rebuilding the great continent of Africa which has already started unless u are blind.Study hard & more much to understand the coplexities of this world if u are to be of great importannce in society not just cheap politiks(exposing ignorance) WORK HARD FOLKS TOGETHER WE CAN DO IT.Just work hard,study hard and I mean HARD!
So, we introduced this tax and raised enough funds to support 5% of current expenditure? Given today’s production, the windfall tax can support 10% of the budget. In as much as the tax is on revenue, it only kicks in when mines start making super profits. The copper price has been steadily rising but the cost of production has remained constant. So, I don’t understand how this theorist can say that the tax is defective. How exactly is it defective? If you look at the damage the trucks transporting this copper are doing to the road network, then maybe it won’t seem so defective!
As far as Im concerned, theres something fishy ‘ can smell a rat. Where on earth can one refuse to pay a tax & you then negotiate with them. The point pay first and talk later. Thats is what happens to us ordinary Zambian…
I do pray that we will one day get out of this culture of kick backs.
Have you seen the fine for polluting the Kafue River today?
#3 Ba MrK,
Simple reasoning nanimwe. Anywhere where there are taxes, first you remove cost from revenues and what remains is profit. That is what you tax. You don’t need to tax pama revenues even before costs are covered. If you want windfall, it should be on profits and that’s where variable taxes come in. It goes like this ba MrK, first $xxx are taxed at say 30, next $yyy taxed at 45%, excess at 100%…you get the sense ba MrK. So don’t mislead us with your rantings
#14 splaka, of course it is defective because you want to collect taxes on revenue and not profits. That’s why it is defective. You get it?
Dundumwezi,
Like I said, the windfall tax and the variable profit tax are both progressive taxes.
Secondly, revenues are already taxed through the mineral royalties tax. It was 0.6%, it is now 3%, in Chile it is 6%.
So please get your facts right before you correct me, let alone start namecalling. :)
For some reason Senior citizen has absconded himself from commenting on this topic. Guys register en mass and vote next year, contonue spreading the news on voting, let us change the system and now. We just cannot afford any laxity at all.