WINDHOEK, 22 MAY (NAMPA) - The outgoing president of the Chamber of Mines of Namibia Mark Dawe said since the policy on strategic minerals was announced on 21 March 2011, there has been no legislation passed to date for its implementation.
Speaking at the 34th annual general meeting (AGM) of the Chamber of Mines of Namibia in the capital on Tuesday, Dawe said the continued uncertainty is not conducive to a healthy investment climate, particularly in exploration.
It is in the interest of both government and the private sector that government introduces thoroughly-researched legislation guiding the modus operandi of the perceived joint ventures between the State-owned mining company, Epangelo Mining, and the private sector, he noted.
?Only time will tell on the success or failure of this policy. Although the Chamber supports Government?s participation in the mining sector, we remain concerned that should the State-owned mining company own all strategic mineral deposits that are yet to be discovered, there could be a raft of unintended consequences, not least of which are landlocking and private deal-seeking,? he said.
He, therefore, encouraged Government to maximise its returns from this sector through optimising the effective taxation rate.
On tax amendments, Dawe said the Chamber of Mines was relieved that Government retracted some of the income tax proposals which were announced in the second half of 2011, thereby saving the industry from total collapse.
By far the most damaging of these tax proposals were the additional taxes on gross sales of 15 per cent Value-Added Tax (VAT) and a five per cent Export Levy, as well as an increase of Corporate Tax from 37.5 per cent to 44 per cent for non-diamond mining companies.
Stressed Dawe: ?With every threat, there is a hidden opportunity. The result of our intense negotiations has been a better understanding and cooperation between the Ministry of Finance (MoF) and the private sector, and the realisation that Government would be well-advised to involve the industry in modelling any proposed changes to the tax regime prior to the announcement of a policy shift.?
However, there are still some outstanding tax matters which require continued consultation and a speedy conclusion, he said, noting that 2012 ended without a response from the Minister of Finance to the Chamber?s submission on the Export Levy.
?This ambivalence on the part of Government is not conducive to the promotion of confidence for new players in the mining industry,? Dawe stressed.
The new withholding tax regulation which became law on 31 December 2011 continues to pose concerns not only to mining, but to all sectors of the economy.
The Chamber has thus proposed that the rate be revised downwards from 25 per cent to a more competitive figure, and even more importantly, to revise the definition of management fees to exclude consultancy fees.
?This is a vital piece of legislation requiring immediate reconsideration on the part of the Ministry of Finance,? stated Dawe.