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Zambia's 2012 mining revenue surge

Jan 08 2013 19:25
Reuters
Lusaka - Zambia's mining revenue rose by a quarter in 2012 after Africa's top copper producer doubled royalties charged on mining firms, bringing in badly needed revenue for social spending and farm subsidies.

Zambia, like other African countries, wants to extract more revenue from their mining industries - a move miners have warned may cause them to scale back operations.

Foreign mining companies operating in Zambia include Canada's First Quantum Minerals, London-listed Vedanta Resources, Glencore of Switzerland and Barrick Gold of Canada.

Zambia collected 4.4bn Zambian kwachas ($830.19m) in mining taxes last year compared with 3.3bn Zambian kwachas in 2011, Deputy Finance Minister Miles Sampa told Reuters on Tuesday.

Of these, revenue from mineral royalties jumped 72% to 1.5bn kwacha in 2012, while revenue from the profit-based income tax was largely steady at 2.6bn kwachas.

"The problem is that only about two mines are currently declaring profit and paying the due tax," Sampa said.

"We should be able to increase mining revenue further if we address the problem of tax avoidance."

Zambia last year brought in guidelines for mineral exports to allow state agencies to verify weight and content to enhance transparency.
 
Government estimates showed the country was losing as much as $1bn each year through tax avoidance and the government would this year closely monitor mining companies, Sampa said.

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