Sky Dollar Mutinta

[Kum Dana]

Asdetailed in the Income Tax Act, Zambia has a source-based system for the taxation of income. Income from a source deemed to be a Zambian source is subject to income tax. Corporate income tax (CIT) on mining companies is charged as follows:

Exploration operations are not included under the definition of mining operations and, therefore, the above-mentioned CIT will not apply to a holder of a large-scale exploration licence, provided that they do not undertake any mining operations. Notwithstanding this, however, a holder of an exploration licence will be required to submit annual CIT returns.

During the construction and production phase, mines usually purchase machinery that is imported. Import duties (at a rate of up to 25 per cent) and VAT (at 16 per cent) are levied on these goods. ZRA has the discretion to grant tax relief to the mines in the form of various allowances, deductions and write-offs, such that mining entities defer the taxation to a later year when they are in a better financial position to pay. Export of goods from Zambia is considered to be a zero-rated supply if requisite evidence of exportation is produced.

Tax required to be deducted from any dividend shall be deducted at the rate of zero per cent per annum for any dividend paid by a company carrying on mining operations. Withholding tax applies at the following rates in respect of other payments:

Whereas the normal CIT rate is 35 per cent, mining companies carrying out mining operations (for both base metals and Industrial minerals) are taxed for CIT purposes at 30 per cent. In addition, withholding tax on dividends paid by mining companies is zero per cent whereas it is generally 15 per cent or 20 per cent for other companies depending on whether the recipient is a resident or non-resident.

Mining companies may be allowed to maintain account books in US dollars in accordance with generally accepted accounting principles if the Commissioner-General is satisfied that not less than 75 per cent of the gross income is earned in the form of foreign exchange from outside Zambia.

For a person carrying on mining operations in a mine that is in regular production and who is also the owner of, or has the right to work a mine that is not contiguous with the producing mine and from which the person has made a loss in the charge year, the amount of such loss shall not be deducted in ascertaining the gains or profits from his or her mining operations provided that such loss may be allowed as a deduction in ascertaining the gains or profits arising from the same mine when it commences regular production.

The holder of a mining right is entitled to exemption from customs and excise duties, and from any other duty or impost levied under the Customs and Excise Act, in respect of all machinery and equipment (including specialised motor vehicles) required for any of the activities carried on or to be carried on in pursuance of the right or otherwise for the purposes of his or her investment in mining or prospecting or exploration.

This option is available under the Mines Act, in that the Commissioner-General may, on application by the holder of the mining right, defer payment of royalty due from the holder if, during any period for which a payment of royalty is due the cash operating margin of the holder in respect of mining operations in the mining area falls below zero.

There is currently no legislation providing for tax stabilisation agreements or clauses. However, the Zambian government has been known to enter into concession agreements with individual mining companies in which stabilisation clauses have been included. In the event that there is a tax dispute between mining entities and the government, the mining entities can lobby the government, who will then consider their concerns.

The government is not entitled to a carried interest or a free carried interest in mining projects. The government plays more of a regulatory role, but has no direct participation in terms of the direction of mining operations or shareholding in mining right holders.

Property transfer tax (PTT) is payable on the transfer of any type of mining right from one party to another. Any mining right under the Mines Act is considered to be property and the Property Transfer Tax (Amendment) Act No. 16 of 2015 provides that PTT of 10 per cent of the realised value, which is the value of a good sold on the open market, in respect of a mining right or an interest in the mining right, shall be payable on the transfer, assignment, encumbrance or other dealing involving a mining right or mining interest.

Born on July 15, 1972, a medical Doctor married to Mutinta Mudenda, a Doctor too and currently Director at Malaria Control, whose promotion came as a result of Chilufya being a Minister. They have two kids together.

Chilufya was Deputy Minister of Health between 2015 to 2016 and got appointed to full cabinet Minister in the same Ministry which he served till today and he is Member of parliament for Mansa Central.

He has acquired a lot of properties(Real estates) in Lusaka, Mansa and Copperbelt. Most of these were built by China Civil Engineering Construction. This is a Chinese Company that get tenders for construction of Hospitals in the recent project to upgrade Clinics to First level Hospital. Prices were inflated for selected rural Health Centres. The project started when he was Deputy Minister. The recent Lot of properties are the 12 flats along Kafue Road. Apart from the 12 flats, he also received two high value motor vehicles. The company also renovated Henry Courtyard Lodge in Mansa. This same company got contracts to construct 650 Health Posts country wide, Dr Chilufya got millions of dollars in cuts from both contracts and there was no value for money because the contract prices were highly inflated.

With clever Siame Mpoha, Propriator of Savenda Management Services, Savenda was given a contract to supply Ambulances at bloated Prices. The difference was shared between Mpoha and Chilufya. They also lied that over 200 people would be trained in operating and maintaining these Ambulances. It has not been done to date and there are no signs it will ever get done and yet the money has been approprieted.

Using proxy companies, he has been supplying to MOH and medical stores . He has also been using some Pharceutical Companies to supply and in turn these companies have paid him huge sums of money in kickbacks. He has taken over procurement unity of Ministry of Health. All these cases have been fully investigated by ACC and by now they should have arrested the man but of course we know how this PF government operates. reward the criminals and punish the innocent.

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