Zambia revenue from mining taxes hits record high

LUSAKA, August 14 (Reuters) - Zambia's revenue from mining taxes last month hit an all-time high of 255.6 billion kwacha ($55.38 million) after copper producers complied with new taxes, the revenue authority said on Thursday.

The Zambia Revenue Authority (ZRA) said all copper mines have payments of new windfall tax at 25 percent, mineral royalty which was raised to 3.0 percent from 0.6 percent and corporate tax at 30 percent from 25 percent.

"All the mining firms complied with the new tax regime and paid mineral royalty at 3.0 percent," the ZRA said in a statement.

"In July a total of 255.6 billion kwacha was paid in mining taxes of which windfall tax stood at 109.5 billion kwacha, company income tax was 105.1 billion kwacha and mineral royalty contribution was 41.0 billion kwacha."

The ZRA also said mineral royalty paid by the foreign firms averaged 25.75 billion kwacha in June and July from around 5.2 billion the firms used to pay in 2007.

The government introduced the new taxes in April, saying it wanted Zambians to benefit from returns on copper and cobalt following higher global metals prices.

It has said most funds raised from the taxes would be spent on infrastructure development and poverty reduction programmes.

Initially, some firms objected to the new taxes, saying the government had abrogated development agreements it signed with investors granting them tax relief for as long as 20 years.

Canada's First Quantum Minerals (FM.TO) is one of a number of foreign mining firms which objected to a set of new taxes introduced in the copper-rich southern African country in April.

The windfall tax, introduced by the government for the first time in the mining sector, will apply whenever prices of metals increase beyond twice the cost of production.

Zambia also introduced a variable profit tax at 15 percent on taxable income above 8 percent and raised corporate tax to 30 percent from 25 percent. This effectively raised mining taxes to 47 percent from the previous 31.7 percent.

($1=4615 Kwacha) (Reporting By Shapi Shacinda; Tel: +260-977843609/260-955779523; Editing by Christian Wiessner)