The new UPND government’s plan to rationalise the mining tax regime to attract investment and boost production has been welcomed by the country’s largest taxpayer, First Quantum Minerals (FQM).
The 2022 Budget – under the theme ‘Growth, Jobs and Taking Development Closer to the People’ – presented to Parliament on Friday (October 29, 2021) by Minister of Finance and National Planning Dr Situmbeko Musokotwane unveiled a key revision to the Zambia mining tax regime; namely the return to the approach followed by other global mining jurisdictions which enables companies to deduct mineral royalty tax payments against corporate income tax.
First Quantum paid more than US$850 million in taxes, royalties, duties, and fees to the Zambian government, along with community and infrastructure expenditure in 2020.
Despite the additional challenges faced in 2020, FQM achieved its highest-ever annual copper production, which was reflected in the increased amount of its contributions to Zambia’s public finances. The report shows that FQM paid approximately US$209.5 million in mineral royalties ($195.8m, 2019), and a further $202.8 million in company income tax in Zambia during 2020 ($176.2m, 2019).
