Zambia: Government Lost Out K93 Billion in Tax Concessions

(The Times of Zambia) 12th August 2007
PARLIAMENT yesterday heard that the Government lost K93.78 billion as a result of various tax concessions in the period January to December last year. Finance and National Planning deputy Minister Jonas Shakafuswa said in response to a question from Gwembe MP Brian Ntundu (UPND) who wanted to know how many foreign investors or companies enjoyed tax concessions and how much revenue the Government had lost as a result. Mr Shakafuswa said what should be realised is that concessions were not only offered to foreign investors but also applied to local companies undertaking activities for which tax concessions were given. He explained that nine companies were enjoying concessions under income tax and most of these were in the mining sector. The companies that enjoyed tax concession were First Quantum Mining and Operations, Konkola Copper Mines, Chambeshi Metals, Luanshya Copper Mines, Chibuluma Mines and Kansanshi Mines. The rest that benefited from the concessions were Non-Ferrors Corporation (NFC) African Mining, Mopani Copper Mines and Lumwana Copper Mines. "These companies enjoyed concessions in form of company tax rate of 25 per cent instead of the general company tax rate of 35 per cent. "They also enjoyed concessions in the form of mineral royalty rate of 0.6per cent instead of the general rate of two per cent, which was revised to three per cent in 2007 budget," Mr Shakafuswa said. He also said that in terms of trade related tax concessions over 800 both local and foreign companies were benefitting. Mr Shakafuswa also said 16 companies were currently listed on the Lusaka Stock Exchange (LuSE). He was responding to a question by Mr Ntundu who wanted to know the number of companies listed on the Lusaka Stock Exchange. Mr Shakafuswa also said the nation would be informed on the status of Celtel as regards the listing of shares on the market. He was responding to a question by Chisamba MP Moses Muteteka (MMD) who wanted to know when Celtel would truly list its shares on the market so that Zambians could acquire some. Mines and Minerals development Deputy Minister Maxwell Mwale told the House that Chambishi Copper Smelter would be completed by December 2008 and US$300 million had been spent on the construction of the smelter. He said the company was currently employing 469 members of staff on renewable contracts and once completed 1,500 people were expected to be employed. Mr Mwale was responding to a question by Chipili MP Davies Mwila (PF) who wanted to know when the smelter would be completed and the number of people employed He also disclosed that 260 Chinese were employed at the firm.