Zambia’s cabinet approved changes to its mining tax system that will lead to lower revenue and require spending cuts.
Cabinet will approve the details on April 20 and then the amendments will be presented to lawmakers, Amos Chanda, President Edgar Lungu’s spokesman, said in an e-mailed statement. No details of the changes were provided.
The changes will “have revenue implications requiring rationalization of expenditure,” according to the statement.
The government of Africa’s second biggest copper producer introduced the new system in January, which scrapped profit tax in favor of higher mineral royalties to boost revenue from mining companies. The Chamber of Mines said that the changes would lead to 12,000 job losses this year and some mines would close. Barrick Gold in December said it would halt operations at it Lumwana Mine because of lower prices and the higher royalties.
Lungu said he has directed the technical committee he appointed to address the new tax regime to continue talks with stakeholders. The president said he hoped the changes would “promptly eliminate market anxieties in the mining sector and forestall any potential instability.”