December 3, 2009 / 3:05 PM / 10 years ago

INTERVIEW-Zambia plans no mining tax rises-trade minister

* Govt plans no mining tax increases

* Zambia FDI seen at $1.4-1.5 bln 2009, $2 bln 2010

* Zambia likely to delay investment roadshow to Dubai

By Carolyn Cohn and Joe Brock

LONDON, Dec 3 (Reuters) - Zambia plans no tax rises for mining companies in 2010, and the country is expecting an increase in foreign direct investment to $2 billion next year, Zambia’ trade minister said on Thursday.

The International Monetary Fund and World Bank have said Zambia should increase its mining taxes and should not have abolished a 25 percent mineral windfall tax this year.

“You cannot just be playing around with taxation — one year you do this, another year you do that,” Felix Mutati told Reuters in an interview on the sidelines of a Zambia investment forum.

“Our focus will not be new taxes for the mining sector, let’s encourage investment...there (will be) no tax increases in the mining sector”.

Zambia is Africa’s largest copper producer.

The southern African country of 12 million people has been waiving taxes, including a 25 percent import duty on imported equipment and 16 percent value added tax, for foreign companies investing in economic zones, in a bid to attract more investments and create jobs.

Mutati said he saw foreign direct investment into Zambia increasing to $2 billion in 2010 from around $1.4-1.5 billion this year, due to investment in economic zones, shopping malls, mining, agriculture and infrastructure.

“We have a target of $2 billion for 2010 — we need to attract at least $2 billion in foreign direct investment,” he said.

Mutati said Zambia was the largest recipient of FDI in sub-Saharan Africa after South Africa.

Mutati said Zambia received little in the way of remittances or investment from Dubai, so was unlikely to be heavily affected by the debt restructuring woes hitting the emirate.

However, he said Zambia had planned a visit to Dubai later this month to highlight investment opportunities in the hotel sector.

“We were planning to extend an investment promotion to Dubai from December 12 — we may have to hold back,” Mutati said. (Writing by Carolyn Cohn; editing by Chris Pizzey) ((; Reuters Messaging; +44 207 542 6320))

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