Local News

US$25m mineral royalty tax loss projected

By BUUMBA CHIMBULU

GOVERNMENT is this year expected to lose US$25 million in Mineral Royalty Tax (MRT) as the mining sector will be unable to pay the projected income due to among others, Covid-19 related activities.

Zambia Chamber of Mines (ZCM) is expected to pay US$65m to Government in mineral royalties over the three months period, a reduction from the projected US$90m.

This is as result of the on-going global spread of Covid-19 pandemic which has affected the revenue stream of the mining sector, says ZCM Chief Executive Officer, Sokwani Chilembo.

Mr Chilembo said the mining companies had suffered an alarming drop in revenue over the three months from February to April this year, illustrating the deep impact of Covid-19 on mining finances.

“The fall in mining revenues has led to a corresponding fall in mineral royalty payments.

“For the industry, royalty payments are estimated to have come in at approximately US$60 to US$65 million over the three months, rather than the US$85 to $90 million that could have been expected, illustrating how closely Government revenues mirror the fortunes of the mining industry,” Mr Chilembo said.

He said revenue fell by 30 percent over the period due to the severe global restrictions on movement and a decline in copper prices.

Mr Chilembo said the global restriction in mobility played havoc with the mining supply chain, and hindered the export and sale of copper.

On the other hand, he said, the copper price was down on average by 12 percent over the period compared to 2019.

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