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CTPD Advice to the Government

The government should take into account introducing a mineral royalty tax model for shares of mining corporations, according to the Centre for Trade Policy & Development (CTPD).

The mineral royalty tax model agreed upon with Kansanshi rather than a Dividend model for shares, according to CTPD Head Researcher BOYD MULEYA, should be repeated in other mines.

Since the Dividend model is profit-based, according to Mr. Muleya, applying the mineral royalty tax model on shares will allow the nation to receive income from mining operations even when a profit is not earned.

According to him, stable mine earnings will enable ZCCM-IH to raise money to implement its investment strategy.

Zambia will gain from transitioning to the mining royalty tax model on shares since it will produce a more stable income stream, says Mr. MULEYA.

However, he has recommended that the government change the contract with Kansanshi Mine so that ZCCM-IH receives a 4 percent royalty payment rather than the 3.1 percent specified in the agreement.

According to the terms of the agreement, ZCCM-IH will get a 3.1 percent royalty payment from the sales of Kansanshi, which is run by First Quantum Minerals, said Chief Government Spokesperson CHUSHI KASANDA on Friday.

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