Immediate past president for the Federation of Small Mining Association of Zambia (FSMAZ) Mark Kalemba says the removal of Mineral Royalties as stand alone revenue in this year’s national budget is retrogressive.
Mr. Kalemba states that the move demands all interest groups especially elected and traditional leaders in mining areas to petition government through the minister of Finance Dr. Situmbeko Musokotwane to reverse the decision.
He explained in a statement that Mineral Royalty revenue is not a tax, but a form of rentals or appreciation by the mining companies to the owners of the land where mining operations are taking place.
He said the announcement by the minister of Finance during the presentation of the 2022 national budget in Parliament that Mineral Royalties will now be deducted from income tax, contradicts the true meaning of Mineral Royalties.
He said naturally, the primary beneficiaries of Mineral Royalties are the owners of that peace of land where mining is taking place and host communities.
“Therefore it is erroneous for the minister of finance to deduct Mineral Royalty, which is not a tax from income tax,” said Mr. Kalemba.
He said Mineral Royalties are the only direct form of revenue intended to be enjoyed by communities hosting mining activities saying associating it with income tax is deliberately denying communities hosting mining activities from directly benefiting from natural resources in their locality.
He further stated that move is retrogressive, because the levels of benefiting from the income generated from natural resources should differ between hosting and non hosting communities from where mining activities are taking place.
He said equity on the levels of benefiting from natural resources can only be achieved with the recognition of the difference between Mineral Royalties and income tax.
“And equating the two to mean the same thing is not correct because local communities have been denied this opportunity of benefiting from natural resources for a very long time because of such continued misapplication of this vital revenue,” he said.
He said it is unfortunate that even the local leadership seem to be missing the importance of the fiscal legislation when demanding for maximising benefits from mining activities within their vicinity.
He said it is incumbent upon those affected to demand for progressive mining legislation if they have to benefit from their God given resources.
“Especially, us the people of North Western province, it is very important that we carefully scrutinise such pronouncements because these have been the sources of underdevelopment in the province,” he said.