Partnership between Government and miningcompanies in promoting economic benefitswithin mining area communitiesBy Grain Malunga FIMMM
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
TAXATION
PRODUCTION BASED TAXES PROFIT BASED TAXES
Application/Registration/Stamp Duty Corporate Income Tax
Royalties Profit Tax on Dividends
Sales and Excise Tax Royalty Based on profit/ Income measures
Payroll Tax Withholding Tax on remitted dividends
Export Tax Resource Rent Tax
Import Duty
Value Added Tax
Land Rents/Withholding Tax
Withholding Tax on Loan Interests and Services
Property Tax
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
CONTRIBUTION TO MALAWI’S ECONOMY
TO ACCOUNT NUMBER 1• Application fees• Ground rent• Royalty• Corporate tax• PAYE• Resource rentSOCIAL CORPORATE RESPONSIBILITY
– Paladin : Water, Health, Agriculture, Infrastructure– Shayona Cement: Education, Clinic– Surestream: Football academy, Housing– Mchenga Coal Mines: ?– Cement Products Limited: Infrastructure, education– Mkango resources: Water
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
ARE COMMUNITIES BENEFITING ENOUGH FROM MINERAL DEVELOPMENT?
• Government controlled revenue is a cake for the whole country
• Corporate Social Responsibility misunderstood as “MUST”, it is a moral way of doing business and fosters good relationship with local communities
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
HOW DO WE FOSTER SMART PARTNERSHIP BETWEEN MINING COMPANIES, GOVERNMENT
AND LOCAL COMMUNITIES?• Government to come up clear in terms of
ownership of mineral resources; is it the President, State or Chiefs
• Non Tax Revenues to be split between Account no. 1 and Community trust (royalties and application fees)
• Government to encourage minority shareholdingbetween community trust and mining company (20 km radius)
• Encourage Community Development Agreement during feasibility studies (20 km radius)
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
EXAMPLE OF MINING REVENUE FOR GOVERNMENT
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
THANK YOU
ALTERNATIVE MINING INDABA, 25th to 27th November 2014
Kayelekera Mine : Aerial View
ALTERNATIVE MINING INDABA, 25th to 27th November 2014