By MILDRED KATONGO, CATHERINE NYIRENDA and JUDY HARA –

STAKEHOLDERS have predicted economic stability and improved exchange rates following Government’s decision to revise the mineral royalty tax regime.
Government has re-introduced the 30 per cent corporate income tax on mining operations and pegged the mineral royalty tax for open cast and underground mining at nine per cent.
The tax revision is expected to result in an estimated loss of K2.3 billion to the Treasury but that the Ministry of Finance has been tasked to take necessary measures to address the shortfall.
Chamber of Mines of Zambia president Jackson Sikamo said the principle of returning to a two-tier tax system will ensure increased revenue to Government coffers for social and economic development on a sustainable basis.
Mr Sikamo said the decision will help sustain the mining industry and secure direct and indirect jobs.
He said the approved changes will also ensure efficiency in the mines by optimising cost profiles.
“We welcome Government’s announcement on the changes to the 2015 tax regime, this will create stability, consistency and transparency to enable long-term planning by the mine operators and potential new entrants into the industry,” he said.
Mine Workers Union of Zambia (MUZ) general secretary Joseph Chewe said the decision would increase foreign direct investment and safeguard miner’s jobs and promote job creation.
Mr Chewe said Government had demonstrated its commitment to ensuring that challenges faced in the mining sector are addressed.
“With this decision the economy is set to receive increased foreign direct investment, protect current jobs and promote new ones,” he said.
National Union of Miners and Allied Workers (NUMAW) president James Chansa said Government should be commended for its commitment to developing the country.
Mr Chansa, however, called for continued dialogue in ensuring growth in the mining sector.
The Private Sector Development Association (PSDA) advised the Government to consult widely as it formulates the 2016 national Budget to avoid unnecessary challenges.
PSDA chairperson Yusuf Dodia said it is imperative that the Government engages various stakeholders and consult widely before it formulates the 2016 national budget.
Mr Dodia said reducing the mineral taxes to nine per cent was reasonable but that it must be understood that the revision is purely because of the reactions from the mining companies.
National Restoration Party (NAREP) president Elias Chipimo, who welcomed the newly approved amendment announced on Monday, predicted an appreciation of the local currency.
Mr Chipimo said in an interview yesterday that the adjustment will give relief to the mining companies who had been trying to adjust financially in their operations with the new policy decisions as well as lack of Value Additional Tax (VAT) refund by Government.
“These issues were challenging for the mining companies who are still the major sources of Zambia’s income, this in turn affected the local currency,” Mr Chipimo said.
Mr Chipimo commended the current administration for its commitment to issues affecting the nation.
MMD spokesperson Raphael Nakachinda also welcomed the decision by Government to adjust the mining taxes but indicated that the party was still studying the impact of the adjustment.
Mr Nakachinda said if the move would save the mining industry and salvage the situation where some mining companies wanted to pull out, it was a welcome move.