August 17, 2011 / 5:06 PM / 8 years ago

UPDATE 1-Namibia says will not raise mining tax to 44 pct

* To keep current rate of 37.5 pct, add surcharge

* Says reviews due to concerns from industry (Adds details)

WINDHOEK, Aug 17 (Reuters) - Namibia has decided not to go ahead with its plan to raise the mining tax for companies in the non-diamond sector to 44 percent after the industry expressed concerns, the finance ministry said on Wednesday.

Instead it will stick with the current rate of 37.5 percent and proposed a formula-based surcharge to get extra revenues when the economy is doing comparatively well.

Namibia had proposed to hike the tax last month to boost revenues.

The ministry said it proposed that the cabinet review some of the planned tax measures over which major concerns had been raised.

“The proposed 44 percent corporate income tax for non-diamond mining sector is done away with,” the ministry said in a statement.

“Instead, the current rate of 37.5 percent to operate in conjunction with a formula-based surcharge to capture additional mining revenue during better economic periods is proposed.”

Namibia is one of the world’s largest producers of diamonds and has deposits of uranium. Foreign firms are exploring in the southwest African country for gold, lead, zinc and iron ore.

Rio Tinto and Australian miner Paladin Energy are the current uranium producers in Namibia. (Reporting by Servaas van den Bosch,; Writing by Olivia Kumwenda; Editing by Anthony Barker)

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