Zambia won't curb mining profits, while seeking further FDI
Published by MAC on 2009-12-22Early this month, Zambia's trade minister refused to impose further taxes on domestic mining companies, despite the World Bank urging it to do so.
Instead, the minister was reported to be heading for Dubai to check out investment in his country's hotels' sector. After the recent dramatic collapse of the tourist-oriented Dubai World project, the emirate is aid to be in debt to the tune of US$150 billion.
The minister "held back" on his trip.
Zambia plans no mining tax rises - Trade Minister
Reuters
3rd December 2009
LONDON - Zambia plans no tax rises for mining companies in 2010, and the country is expecting an increase in foreign direct investment to $2-billion next year, Zambia' Trade Minister said on Thursday.
The International Monetary Fund and World Bank have said Zambia should increase its mining taxes and should not have abolished a 25% mineral windfall tax this year.
"You cannot just be playing around with taxation - one year you do this, another year you do that," Felix Mutati told Reuters in an interview on the sidelines of a Zambia investment forum.
"Our focus will not be new taxes for the mining sector, let's encourage investment...there (will be) no tax increases in the mining sector".
Zambia is Africa's largest copper producer.
The southern African country of 12-million people has been waiving taxes, including a 25% import duty on imported equipment and 16% value added tax, for foreign companies investing in economic zones, in a bid to attract more investments and create jobs.
Mutati said he saw foreign direct investment into Zambia increasing to $2-billion in 2010 from around $1,4 to $1,5-billion this year, due to investment in economic zones, shopping malls, mining, agriculture and infrastructure.
"We have a target of $2-billion for 2010 - we need to attract at least $2-billion in foreign direct investment," he said.
Mutati said Zambia was the largest recipient of FDI in sub-Saharan Africa after South Africa.
Mutati said Zambia received little in the way of remittances or investment from Dubai, so was unlikely to be heavily affected by the debt restructuring woes hitting the emirate.
However, he said Zambia had planned a visit to Dubai later this month to highlight investment opportunities in the hotel sector.
"We were planning to extend an investment promotion to Dubai from December 12 - we may have to hold back," Mutati said.