State owned Zambia Consolidated Copper Mines Investments Holding (ZCCM-IH) Chief Executive Officer – CEO Dr. Pius Kasolo has been fired. Mines Minister Richard Musukwa announced the development at state house during a press briefing.
He added that Dr. Kasolo will be replaced in an acting capacity by ZCCM-IH Chief Investment Officer, Mabvuto Chipata.
On Monday, Dr Kasolo is quoted as having issued a statement were he said the 2019 mining fiscal regime may negatively affect ZCCM-IH’s profitability and dividends payable to government during the annual report presentation for the year ending March 31, 2018.
This statement is contradictory to his employers position which is government, whose 2019 budget and fiscal regime is being contested by mining houses. This statement by Dr. Kasolo may have costed him the top job.
“At the moment, we can’t say how it’s going to affect ZCCM-IH because most of these taxes haven’t come to fruition. But by projecting some of our investee companies, what we’ve looked at and discussed with them, I can give an example of Lubambe (Copper Mine)”.
“The funding to develop that mine has become a bit difficult because the banks have become quite tight with their money because they are not sure about the tax regime in Zambia, when it’s going to change. So, Lubambe is finding it difficult to raise capital,” Dr Kasolo told journalists at Lusaka’s Southern Sun Hotel, on Monday.
But Musukwa said the new mining fiscal regime was never meant to stifle the industry but was meant to build the economy and develop the mining industry.
“I want to state upfront that the new mining fiscal regime which government has put up in relationship with all stakeholders was never meant to stifle on the industry but to the contrary to ensure that we build our economy and develop the mining industry”
“Government is re-engaging all stakeholders, and mining industries to make sure that we have a win-win situation going forward. Regrettably there has been a lot of inaccurate information put across in the public domain to this call with inflated and false predictions painting a picture of the consequences of the policy of government”.
“This definitely has a potential to damage government’s reputation as a desired investment destination. And you are aware that the proponents to this discourse were envisaged to ensure that they develop such a narrative or perception,” Musukwa said.
One of the biggest contentions has been the huge value added Tax – VAT refunds which the mining houses have been claiming from the treasury estimated at over US$700 million per annum.
The Zambian government has moved to scrap VAT which results in refunds and replace it with a final Goods and Services Tax – GST from 1st April 2019. The rates for GST are yet to be finalized as the government has re-engaged the stakeholders before finalizing and announcing the final tax rates.
The government has signaled a strong stance to its employees on issuing contradictory statements. The last time, it was then National planning minister Lucky Mulusa who was shown the door for a similar incidence of issuing contradictory statements.
File photo below is former ZCCM – IH CEO Anthony Kasolo
