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Cabinet has approved the Income Tax (Amendment) Bill of 2015, which seeks to implement the proposed changes to the mining tax regime and increase corporate income tax for mining operations from zero percent to 30 percent.
Acting chief Government spokesperson Ngosa Simbyakula told journalists shortly after a Cabinet meeting yesterday that the Bill also seeks to introduce a variable profit tax of up to 15 percent for mining operations.
Corporate income tax is a levy placed on the profit of a firm, with different rates used for different levels of profits.
Variable profit tax comes into play when corporate expense varies with production output. Variable costs are those that vary depending on a company’s production volume; they rise as production increases and fall as production decreases.
Dr Simbyakula said the Bill will also seek to increase corporate income tax rate for mineral processing from 30 percent to 35 percent and further limit the deduction of losses for mining operations to 50 percent of taxable profit charge.
Dr Simbyakula, who is also Minister of Justice, said Cabinet approved the Mines and Minerals Development Bill 2015, for introduction in Parliament during this sitting.
Mineral royalty tax has been set at nine percent for open-cast mining operations and six percent for underground mining operations.
“This Bill further seeks to revise the law relating to the exploration, mining and processing of minerals, provide for safety, health and environmental protection in mining operations,” Dr Simbyakula said.
He also said Cabinet has approved the Gold Trade (Repeal) Bill that seeks to repeal the Gold Trade Act, in order to avoid duplicity as dealing in gold will be provided for in the revised Mines and Minerals Development Act.
Cabinet also approved the double taxation agreement between the Zambian government and the Kingdom of Netherlands with a view to avoiding double taxation and prevention of fiscal evasion with respect to taxes on income.
