By Thomas Ngala
MINISTER of Finance and National Planning Dr Situmbeko Musokotwane says government decided to remove export tax on precious minerals and metals because it would have shut down the sub-sector.
Dr Musokotwane said yesterday in a video made available to The Mast putting a tax on such minerals would entail shutting precious stones mining in Zambia.
He said all the other taxes were still there.
“The government is taking this tax to remove the export tax, not all taxes. Let me emphasise this point. The mineral royalty tax remains, Pay As You Earn (PAYE) from this industry remains. All we have done is put the tax on the mineral export, in other words, for every kg [kilogram] of the emeralds for example, you pay a tax. The taxes are paid already in mineral royalty tax. The tax is already paid in the income tax,” he said.
“So, if you put a tax because someone is exporting, basically you are saying, ‘don’t export’. It would be exactly the same as what would have happened if we said ‘if you export beef, before the beef leaves the country, pay tax’. It would be exactly the same if we said ‘if you export maize to Congo DRC, before the maize leaves, pay tax’. It would be exactly the same as would be the case, for example, you manufacture beer, and before the beer leaves, you say, pay tax.”
Dr Musokotwane said if government was able to attract people to add value to cutting stones in the country, then it would make sense to impose the tax.
That was because with the taxing of the stones, few people would be willing to pay that tax.
They would sell domestically in Zambia.
And therefore, because they had sold domestically, they would not pay the tax and they were selling in Zambia because there was somebody who was going to cut stones to add value.
“But what I am saying is that for now, there is no company in Zambia that can absorb all these emeralds and add value to them. The incentives are there but there is simply no one in large quantities who can add value to these stones,” Dr Musokotwane said. “So, therefore, if you are going to continue with this tax, all you are going to do is shut the emerald mines. That is all that is going to happen. Big and small, you will shut them. Now, is that a wise thing? At a time when you want to earn every dollar that you can manage? My answer is, it is not a wise thing.”
Dr Musokotwane said it was better to earn some dollars from the export of the raw stones in the absence of sufficient capacity in the country to add value to them.
