Zambia's economy grew by 6 pct in 2014 and real growth is expected to quicken to 7 percent between 2015 and 2017, the minister of finance said on Tuesday. Alexander Chikwanda said in a statement the government also intended to resolve the issue of VAT refunds with mining companies and hoped to agree with them on new mining taxes.
Africa's second-largest copper producer is withholding $600 million in VAT refunds owed to mining firms and will only repay the cash when companies produce import certificates from destination countries. They say this is impossible because of the role of middlemen in the trade. "Our hope is that we can still resolve this matter in a manner that is mutually beneficial for both the country and mining companies," Chikwanda said.
He also said the government remained committed to a new mining tax regime that comes into effect from Thursday, which the industry says it can ill afford. But Chikwanda pledged to engage with producers on "the reported concerns by some mines."
Zambia increased open pit mining royalties to 20 percent from 6 percent and underground royalties to 8 percent from 6 percent in the 2015 budget, a move mining companies said could cost 12,000 jobs. The plan has already prompted Toronto-based Barrick Gold Corp to suspend operations at its Lumwana Copper Mine, which supports nearly 4,000 direct jobs in the area.