Zambia’s 2019 budget increases mining taxes to restraint in debt

The finance minister Margaret Mwanakatwe. Photo: RR

Casablanca, Morocco (ADV) – Zambia will introduce new mining duties to help bring down mounting debt, the finance minister said in a budget speech on Friday, as crowds outside protested about alleged government corruption.

Delivering 86.8 billion kwacha ($7.1 billion) budget in parliament, Margaret Mwanakatwe pledged to bring debt down and to trim the fiscal deficit to 6.5 percent of gross domestic product (GDP) in 2019 from 7.4 percent this year.

The economy of Africa’s No.2 copper producer was expected to grow by at least 4 percent in 2019, around the same as forecast for this year, she said.

Outside parliament, police flanked around 100 demonstrators wearing black t-shirts emblazoned with “Zambia Demands Accountability”.

The International Monetary Fund has put talk of an aid package with Zambia on hold due to the country’s unsustainable debts.

To help tackle debt, Mwanakatwe announced plans to increase the country’s sliding scale for royalties of 3 to 9 percent by 1.5 percentage points. The scale is adjusted so royalties are paid at higher levels as commodity prices climb and are reduced as prices fall.

A new 15 percent export duty on precious metals, including gold and gemstones, will be introduced, while copper and cobalt concentrate imports will incur a new 5 percent levy.

The tax hikes will go down badly with mining companies, including First Quantum, Glencore and Vedanta Resources, which have frequently clashed with the Zambian government over rising operating costs.

© Bur-csa – S.E – African Daily Voice (ADV)