Finance Minister Situmbeko Musokotwane has yet again given mining companies more tax exemptions by suspending import taxes on mining equipment and machinery. This is additional to the making of mineral royalty tax deductible which resulted in the country losing about $200 million in lost revenue.
Mineral Royalty Tax (MRT) was introduced to bring certain loss making mining companies on the tax base as most mining corporations were declaring losses and the tax authorities have no capacity to find loopholes in their tax declarations, which made it difficult to tax the mines.
However, the UPND government in the 2022 budget gave mining companies a tax holiday by reintroducing deductibility of the mineral royalty tax, a move stakeholders described as retrogressive and government has continued to give more concessions to mines which only benefit the mines.
According to Statutory Instrument (SI) No. 50 of 2022 obtained by the Zambian Business Times-ZBT, a rebate, refund or remission of the whole or any part of the duty paid or payable shall be granted to a holder of a mining right.
This is in respect of a mining plant, mining machinery, mining equipment and other goods used in mining operations, other than spare parts thereof, imported or taken out of bond by that holder of a mining right.
The document further states that a holder of a mining right who intends to claim for a rebate, refund or remission of duty shall provide the Commissioner General with details of the mining right, the activities carried out in relation to the mining right.
Other details to be provided include the nature and quantity, substantive tariff description and classification in the customs tariff and customs value of the goods in respect of which the rebate, refund or remission is sought.
In addition, a holder of a mining right shall complete a declaration in Form CE 25 set out in the Eighth Schedule and the goods in respect of which a refund, rebate or remission is granted under this regulation, shall not be sold or otherwise disposed of without the prior consent of the Commissioner-General and payment of the duty thereon at the rate leviable on the goods at the date of the sale or disposal.
The Commissioner-General may for the purpose of determining the amount of duty payable on the goods sold or disposed of take into consideration the depreciation of the goods from the date of importation or removal from bond, and shall remit the duty if the sale or disposal is effected more than five years after the date on which the rebate, refund or remission was granted.
For the purposes of this regulation, “holder of a mining right” means a person granted a mining right in accordance with the Mines and Minerals Development Act, 2015; and “other goods used in mining operations” shall include a transmission or conveyor belt of subheading 5910.00.10, dumpers designed for off- highway use of subheading 8704.10.00, conveyors of subheading 8428.31.00 to 8428.90.00 and mine locomotives of subheadings 8601.10.10 and 8601.20.10.
