Zambia expects $400 million in revenue from windfall mining tax

Zambia expects to raise $400 million in revenue from a windfall mining tax due to be introduced later this year.

LUSAKA (Reuters) - 

Zambia will introduce a windfall mining tax this year in a move it expects to generate $400 million in revenue, President Levy Mwanawasa said on Friday.

He told parliament the new tax regime would effectively increase mining taxes to 47 percent from 31.7 percent.

Mwanawasa's government has faced pressure from unions over the past few years to spread the benefits of its copper wealth, the mainstay of its economy, to its citizens and workers in the industry who have complained of poor wages.

Mwanawasa said the hike in taxes sought to address those concerns.

"The government has decided to introduce a new fiscal and regulatory regime in order to bring about an equitable distribution of the mineral wealth between the partners, namely the government and the mining companies," Mwanawasa told parliament.

Zambia has been in negotiations with mining companies since October last year about proposed increases to mineral royalties, corporate taxes and customs duties on imported equipment, as a way of boosting its revenue from the sector.

(Reporting by Shapi Shacinda; editing by Chris Johnson)

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