for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Zambia president says won't negotiate mine taxes

LUSAKA, February 19 (Reuters) - President Levy Mwanawasa said on Tuesday his government will not renegotiate controversial mining taxes with foreign owners of the copper and cobalt mines barely a week after he invited them to talks.

Mwanawasa said last week that the ministers of finance and mines would meet managers to discuss their grievances over introduction of a 25 percent windfall profit tax and a rise in mineral royalty to 3.0 percent from 0.6 percent.

Separately, Finance Minister Ng’andu Magande told journalists from state media that the mining firms should produce their statement of accounts from the time they invested to show their revenue, profits and losses.

“This level of taxes (is) now neither the highest nor the lowest in the world. To that extent therefore, this level of taxation (is) not negotiable,” a presidential aide said in a statement quoting Mwanawasa.

Mwanawasa said the meeting he had called would only take place for the government listen to views of the mining companies and not to renegotiate the new taxes or development agreements it signed with various mines at the time of investing.

Mwanawasa said taxes which had effectively been raised to 47 percent from 31.7 percent would still ‘leave substantial return on their investments.’

Magande said prices of copper had reached peak levels and Zambia wanted to share profits of copper revenue, the southern African country’s economic mainstay.

A fortnight ago, the foreign firms told a watchdog committee of the parliament that they were rejecting the proposed windfall profit tax and other taxes because the government had not consulted them over the proposals.

In January, the government also introduced a variable profit tax at 15 percent on taxable income above eight percent and raised corporate tax to 30 percent from 25 percent in a move that will effectively raise mining taxes to 47 percent from the previous 31.7 percent, starting from April.

Managers of the major copper and cobalt mines also told the parliamentary committee that they wanted to renegotiate contracts they signed with the government, which awarded them exemptions on taxes for periods between five and 20 years.

First Quantum Minerals FM.TO country manager for Zambia, Chisanga Puta-Chekwe, a local citizen, has said the Canadian-based firm will ask to renegotiate its 15-year agreement on low taxes with Zambian authorities.

Some foreign companies had previously negotiated tax exemptions for periods between five and 20 years. (Reporting by Shapi Shacinda; editing by Michael Roddy)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up