Zambia proposes to increase mining taxes and royalties in 2019 to reduce debt

SMM, Sept. 29: Zambia will introduce new mining tariffs and raise royalties to help reduce rising debt, the Zambian finance minister said in a budget speech on Friday. At the same time, people are protesting against corruption in the government.

The economy of Africa's second-largest copper producer is expected to grow by at least 4% in 2019, roughly the same as this year's forecast, she said.

Outside parliament, police surrounded 100 demonstrators wearing black t-shirts emblazoned with the words "accountability Zambia".

Laura Miti (Laura Miti), one of the organizers of the protest, said: "We are tired of one scandal after another about the misuse of our country's resources."

In recent months, allegations of rising Zambian debt, rising implicit borrowing and government corruption have unnerved investors and western donors.

Britain and Finland froze funding for Zambia this month because of suspicions that $4 million in funding for social welfare programmes could be abused.

The International Monetary Fund (imf) has suspended talks on an aid plan with Zambia because the country's debt is unbearable.

To help solve its debt problems, the Mwanakatwe announced plans to increase the country's royalty ratio from 4 per cent to 6 per cent and introduce a new 10 per cent tax rate when copper prices exceed $7500 a tonne. This ratio is adjusted, so royalty payments are higher as commodity prices rise and lower as prices fall.

China will impose a new export tariff of 15 per cent on precious metals, including gold and precious stones, while a new tariff of 5 per cent will be imposed on imports of copper and cobalt concentrate.

For mining companies such as first Quantum (First Quantum), Glencore (Glencore) and Vedanta Resources (Vedanta Resources), the tax increases will be severely affected. These companies often clash with the Zambian government over rising operating costs.

"because mineral resources are a resource consumption, it is essential to establish an effective financial system for the mining sector to ensure that Zambians benefit from the mineral wealth owned by our country," Mwanakatwe said. "