International copper prices on the London Metal Exchange (LME) have continued to rally despite intermittent losses with three-month copper delivery on the London Metals Exchange trading around US $9,557 a tonne.
The surge in copper prices has prompted strong calls on the government to re-introduce the windfall tax to enable the country tap into current “abnormal profits” being enjoyed by the mines.
The government has, however, remained defiant, arguing that the variable profit tax which is measured in accordance with the profit and cost margins presented by mining was enough to help the country tap into the gains being made by mining firms.
In an interview, Ambassador Mtesa, who is also the executive chairman of the Zambian chapter of CUTS International, said there was urgent need to revisit the current mine taxation.
Ambassador Mtesa regretted the government’s continued resistance to calls for increased revenue collections.
“…By the time copper prices would start cooling down, the foreign mining ‘firms would be laughing all the way to the bank’ while the country would have nothing to show for the copper extracted,” Ambassador Mtesa said.
He observed that although the current surge would boost investor confidence into the country’s main economic stay, it was poor judgement for the government not to tax them properly to make “hay while the sun shines”.
“I know it is important to safeguard investments but the large corporations should also not be allowed to milk the country instead of helping it to grow,” Ambassador Mtesa said. “If they the government don’t like the word windfall tax, let them replace it. It doesn’t matter if they change the name, but whatever they will come up with should translate in increasing revenue collections to improve the lives and welfare of the people.”
Ambassador Mtesa said the country was not benefiting from the vast copper mining sector despite its position as Africa’s top copper producer.
“The over 70 per cent of the population are poor and lack basic essentials such as shelter,” said Ambassador Mtesa. “The issue of revenue collection from the mining companies is an issue of human rights for Zambia, and mind you copper will one day finish.”
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