Mining tax to affect deficit budget

KELLY NJOMBO, Lusaka

THE Jesuit Centre for Theological Reflection (JCTR) says Government’s discussion to approve changes to the mineral royalty tax regime will result in the increase in primary budget deficit and possible limiting of expenditure.

JCTR says the threat of job losses, placing the mines under care and maintenance or completely pulling out of Zambia has caused Government to rescind its decision.

According to a statement availed to the Daily Mail on Friday that the reversal of the mineral royalty tax borders on shifting the tax burden to the poor.

“JCTR is disheartened by the manner in which Government has been coaxed to abandon a progressive tax system in favour of one that has inherent weaknesses such as transfer pricing, hedging and trading through “shell” companies.

“The immediate effect, of course, is an increase in the primary budget deficit with possible rationing of expenditure and possible soaring public debt,” reads the statement.