Zambia’s 2012 mining revenue up 25 pct on higher royalties
Jan 8 (Reuters) – 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 4.4 billion Zambian kwachas ($830.19 million) in mining taxes last year compared with 3.3 billion Zambian kwachas in 2011, deputy finance minister Miles Sampa told Reuters on Tuesday.
Of these, revenue from mineral royalties jumped 72 percent to 1.5 billion kwacha in 2012, while revenue from the profit-based income tax was largely steady at 2.6 billion 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 $1 billion each year through tax avoidance and the government would this year closely monitor mining companies, Sampa said. ($1 = 5.30 Zambian kwachas) (Reporting by Chris Mfula)