The Zambian government has announced that it will not reintroduce a windfall tax on mining which was rescinded in January, a year after its introduction, as the tax caused many mining companies to reconsider their Zambia-based operations.
The tax, introduced in 2008 to support increased infrastructure investment, was imposed on a progressive basis of between 25% and 75%, depending on the price per pound of copper.
Speaking on August 25, Minister for Mining, Maxwell Mwale explained the government's decision not to reinstate the tax, announcing, according to an All Africa report, that Zambia is likely to see gains as a result of sustained and increasing long-term foreign direct investment in the mining sector which will more than compensate for the immediate revenue drop from the abolition of the windfall tax.
"The removal of windfall tax was meant to encourage would-be investors because the windfall tax was seen as a disincentive to any investor," the minister reportedly added.
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