Zambia Mining-Tax Revenue Climbs 33% in 2012 as Royalties Rise
Zambia collected 33 percent more revenue from mining in 2012 after Africa’s biggest copper producer doubled royalty rates.
Mining companies paid 4.4 billion kwacha ($840 million) in taxes and royalties compared with 3.3 billion kwacha in 2011, Deputy Finance Minister Miles Sampa said by phone from Lusaka, the capital, today.
“The mining royalty accounted for the bulk of the increase, about 68%,” he said. Corporate income tax rose by 5 percent, indicating that “only one or two mines report a profit,” Sampa said.
Companies including Barrick Gold Corp. (ABX), Vedanta Resources Plc and Glencore International Plc (GLEN) operate mines in the country. Zambia doubled royalty rates for base metals to 6 percent effective in April, abandoning an earlier move to introduce a windfall tax.
Zambia has accused mining companies of tax avoidance amounting to as much as $2 billion annually and has introduced stricter oversight of production levels. Most mines are still in a capital-investment phase and may pay as much as $1.5 billion in annual tax in the next few years, according to the Chamber of Mines of Zambia.
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