Abolishing Mining Windfall Tax Policy in Zambia – Mar 29,2009

The euphoria on the mining tax regimes that were introduced by the late President Mwanawasa in 2008 is quickly over, like a flash in the pan. It is clear that the late president had a lot of pretentious followers in his party that were not happy with the introduction of new fiscal tax policy for the mining sector. In retrospect, some of them may have rubbed their hands with glee that he passing because his demise presented them the opportunity to make under-handed deals with mining companies to enrich themselves. The pace at which the then new tax regime was soon quickly suspended after President LPM’s death and now finally abolished is disheartening. It is preposterous for Zambia to continue on the current path of economic destruction. Like I have said before on other fora, Zambians need to speak out and demand the right to know how those deals and future deals are made with mining companies. In order to promote transparency, there is need for government to make all the agreements public so that the public can appraise themselves of the various conditionalities in the agreements. However, this is likely to face alot of opposition and resentment from government officials especially in scenarios where some or the majority of the deals may be questionable and largely lack integrity. The removal of the well-intended windfall tax regime will significantly affect the only major opportunity of Zambia benefiting from its own natural resources and wealth through an effective tax collection policy. Revenues which were hitherto highly promising will now be driven down to the extent that we may begin to entertain ideas that mining conglomerates in Zambia own our wealth.  All the ongoing political manoeuvers should serve as warnings to all Zambians that the country is quickly slipping back to Chiluba’s time when the economic plunder machine was let loose.