Some foreign mine owners in Zambia have threatened to su e the government over the new tax regime for the mining sector, the state-run Za m bia Daily Mail reported Monday.
Government has, however, said it was ready to defend its position should any of them decide to institute litigation.
Last week, Minister of Finance and National Planning Situmbeko Musokotwane, held a closed-door consultative meeting with the Chamber of Mines to address challen g es facing the mining sector.
The investors want the government to restore their inherent rights that were ens hrined in development agreements they signed when they acquired former Zambia Co n solidated Copper Mines (ZCCM) assets.
In paying the new taxes, the investors disclaimed that the payments did not nece ssarily mean that they had accepted the tax regime and that they reserved the ri g ht to take legal action.
This is according to the parliamentary committee on estimates’ report that was r eleased last week.
Committee chairperson Godfrey Beene said this was one of the major challenges fa ced in implementing the fiscal regime.
Beene said increasing prices of oil and raw materials had negatively affected im plementation of the windfall tax because the unit production costs for some of t h e companies had risen to levels higher than the first trigger price.
“The trigger price of the windfall tax had been set at US$ 2.50 per pound of cop per, but some of the companies were reporting costs of production beyond this le v el,” Beene said.
He also said the Zambia Revenue Authority (ZRA) did not have adequate informatio n communications and technology and manpower to effectively audit the mining com p anies for tax purposes.