ZAMBIA Law and Practice Contributed by: Harriet Mdala, Natasha Lungu, Samuel Muleya and Chanda Musonda-Chiluba, MAY and Company
• precious metals: high-value metals, including gold, platinum, and silver. Calculation of MRT MRT is calculated based on either the gross value or norm value of the minerals. • Gross value: applies to industrial minerals, energy minerals, and gemstones, calculated as the realised price of the sale free on board (FOB) at the export point or point of delivery within Zambia. • Norm value: used for base metals (eg, cop - per) and precious metals, calculated based on international market prices such as the London Metal Exchange (LME) or Fastmar - kets MB average monthly prices. Incremental MRT Rates for Copper The incremental MRT rates for copper are as follows: • 4% of norm value when the copper price is below USD4,000 per tonne; • 6.5% for prices between USD4,000 and USD5,000 per tonne; • 8.5% for prices between USD5,000 and USD7,000 per tonne; and • 10% when the price exceeds USD7,000 per tonne. Other MRT Rates by Mineral Type Other MRT rates by mineral type are as follows: • base metals (excluding copper, cobalt, vana - dium): 5% of norm value; • energy and industrial minerals: 5% of gross value; • gemstones: 6% of gross value; • precious metals: 6% of norm value; and • cobalt and vanadium: 8% of norm value.
The Mines Act does not differentiate between national and foreign investors in terms of taxa - tion. 4.2 Tax Incentives for Mining Investors and Projects Zambia provides a range of incentives aimed at attracting investment and supporting the mining sector. Key incentives include: • guaranteed input tax claim for ten years on pre-production expenditure for mining, petro - leum or gas exploration for registered suppli - ers in the sector; • any mining company holding a mining licence carrying on the mining of base metals is taxed at 30%; • dividends paid by a mining company hold - ing a mining licence and carrying on mining operations is taxed at 0%; • 25% mining deduction on capital expenditure on buildings, railway lines, equipment, shaft sinking or any similar works; and • zero rating of capital equipment and machin - ery listed in the Second Schedule of the Value Added Tax Zero-Rating Order when supplied to a holder of a large-scale mining licence. Stabilisation Agreements The mining laws in Zambia do not expressly provide for stabilisation or development agree - ments. However, similar protections may be found under the Investment Trade and Business Development Act No 18 of 2022 (the “ITBD Act”). Under Section 6(2) of the ITBD Act, the Zambia Development Agency, with the approval of the Minister of Finance and the Attorney General, may enter into an investment protection and promotion agreement (IPPA) on behalf of the government with investors.
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