adminshowed yesterday, in a move to ensure that mining firms accurately report their sales.
The mines ministry made the announcement in a circular dated Wednesday, saying: “All current permits issued by my ministry are immediately suspended pending issuance of new guidelines by the government.”
Mines ministry permanent secretary Godwin Beene said in the circular that the new rules on metal exports should be ready by October 16.
As the world’s seventh-largest copper producer, the copper accounts for 85 percent of exports, but cobalt, lead, gold, silver and emeralds are also mined.
“What the government is trying to do is improve the reporting of its trade flow, and probably by extension also the mining activity, which will probably end up with tax payments,” said Leon Myburgh, sub-Saharan African strategist at Citi Group.
“There does seem to be some doubt about how much copper is being produced and exported,” he told AFP in Johannesburg.
“The initiative to better capture data regarding copper production and exports is certainly a healthy step for the country,” he said, but added that Sata’s government was creating uncertainty with its abrupt communication of decisions and policies.
The International Monetary Fund has also said the government needs to tax mining more effectively in order to fund development projects.
Investigations into mining tax payments this year have already resulted in the European Investment Bank, the EU’s financial arm, freezing future loans to Swiss mining giant Glencore over concerns about tax evasion in Zambia.
Glencore has denied any wrongdoing.
During the election campaign, Sata’s Patriotic Front promised to change the mining tax regime to focus on companies’ total revenues, rather than profits.
That formula is easier for the country’s cash-strapped authorities to regulate, since it taxes a company’s bottom line without considering its costs or investments – which are self-reported and harder to audit. – AFP.
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