President Levy Mwanawasa of Zambia has announced the cancellation of all tax concessions for copper mining companies operating in Zambia, saying they were ‘unfair and unbalanced’ and that in their place ‘The government has, therefore, decided to introduce a new fiscal and regulatory regime in order to bring about equitable distribution of the mineral wealth.’
The change is dramatic. Without them mining firms would have earned US$4 billion in the 2008/9 financial year but would only have paid tax of US$300 million. Revenue is expected to rise to US$650 million after the change.
Zambia signed legally-binding development agreements with various mining firms to pay fixed taxes for periods ranging from 15 to 25 years at time when copper prices were low at the international market.
Gosh, that\’ll be good for future business investment in Zambia, won\’t it?