UPND defends yuan mine tax payments
By George Zulu
THE United Party for National Development (UPND) says the decision by government to allow the use of China’s national currency for mining tax payments will directly benefit the country.
The party’s media director Mark Simuuwe yesterday defended the new policy measure.
Simuuwe said the Chinese yuan was an optional trading currency acceptable worldwide.
“…warmly welcomes the government’s decision to approve the use of the Chinese yuan [renminbi] as an optional currency for the payment of mining taxes and royalties by eligible mining companies. This policy position is a pragmatic, strategic and economically driven decision, anchored in Zambia’s trade realities, debt profile and the structure of its mining sector,” he said.
Simuuwe said allowing the use of the yuan would significantly reduce exchange rate risk and exposure, particularly translation and conversion costs that arise when transactions were in dollars.
“It will also reduce transaction and clearing costs associated with third-party systems such as the New York Clearing House, thereby enhancing efficiency for both the government and the private sector. Importantly, this decision has direct benefits in relation to debt service management,” he said.
Simuuwe said China remained Zambia’s largest bilateral creditor, and a significant portion of its external debt obligations were denominated in Chinese financing arrangements.
He said facilitating yuan-denominated inflows from mining taxes would improve government’s capacity to match revenues with debt service obligations, reduce currency mismatch risks and enhance overall debt sustainability.
“The mining sector is the backbone of Zambia’s economy, contributing significantly to the government revenue, export earnings, employment, and foreign exchange inflows. Notably, the sector has a strong and growing Chinese presence, with major Chinese investments across copper mining, processing, and related infrastructure,” he said.
Simuuwe said the ruling party believed that the framework should go beyond mining taxes and Chinese debt service but extend to broader Zambia-China trade and investment activities, including imports, exports, project financing and industrial cooperation.
“The broader economic benefits of this decision include: Lower transaction and compliance costs for mining companies and investors; reduced pressure on US dollar demand, supporting foreign exchange market stability; improved predictability and efficiency in revenue collection for the government,” he said.
Simuuwe said the decision was not a political move but a sound economic reform, consistent with global best practice as it reflects the New Dawn government’s commitment to fiscal prudence, innovation, and economic transformation.
