Lusaka - Copper-rich Zambia will fall far short of its target of raising half a billion dollars in mine taxes this year because of the significant drop in international copper prices caused by the global economic downturn, it emerged Wednesday. Zambia Revenue Authority (ZRA) commissioner Chriticles Mwansa told reporters that the commission had only managed to collect 293.1 billion kwacha (about 63 million dollars) so far this year, far short of its 415-million-dollar target.
The intake was comprised of 126 billion kwacha in windfall taxes, 144.9 billion kwacha in mineral royalties and 22.2 billion kwacha in corporation tax.
Mwansa said the financial crisis, which has staunched global demand for copper and other commodities, had also forced some mining companies to cut back production.
Since the financial crisis began in earnest in the United States in September, copper prices have tumbled from record highs of nearly 8,500 dollars per tonne between 2005 and 2007 to around 3,500 dollars per tonne.
So far, Canada's First Quantum Minerals has retrenched over 500 workers at two mines.
Dutch mining company Enya Holdings BV has also sent some workers on forced leave.
In January, Zambia increased mineral royalties from 0.6 per cent to 3 per cent and corporation taxes from 25 per cent to 30 per cent in a bid to better take advantage of high copper prices.
A 25-per-cent windfall tax on copper was also introduced. The move prompted some foreign mining firms to threaten legal action against the government.
Zambia's central bank said the recession in many leading economies threatened growth and inflation in the former British colony. The economy had been forecast to grow 7 cent in 2008 and inflation to remain in single digits.
Copper accounts for 80 per cent of Zambia's export earnings. The country's strong growth in recent years has been driven by copper exports.
