By Shapi Shacinda
LUSAKA, Jan 14 (Reuters) - The $400 million Zambia seeks to earn via a new windfall tax from copper exports this year will not benefit miners unless the government slashes the 35 percent personal income tax, unions said on Monday.
The Mine Workers Union of Zambia (MuZ) and National Union of Mining and Allied Workers (Numaw) said the proposed tax would not directly benefit the workers in the mineral-rich Copper Belt region because the funds would be spent on national projects.
President Levy Mwanawasa said on Friday that Zambia would introduce a mining tax in 2008 that should earn $400 million in revenue and effectively increase mining taxes to 47 percent from 31.7 percent.
Head of the MuZ Rayford Mbulu said his union would propose a cut in the 35 percent personal income tax miners in the copper and cobalt mines pay because the funds to be raised from windfall mining tax would cover loss of revenue by the Treasury.
"We now want the government to reduce personal income tax which is 35 percent of gross pay, including allowances so that the workers can benefit directly from the money the government will raise. The government should cushion the impact of high tax," Mbulu told Reuters.
Numaw general secretary Albert Mando said miners were going to benefit only if the bulk of the revenue the government would collect was spent on improving facilities in mining areas.
"We pay too much tax as people who produce the copper and we require some kind of cushion on tax, we want the government to address this in the budget this year. We would be glad if most of the money was spent on improving mine townships," Mando added.
Mbulu said the workers were "paying too much" in personal income tax while the owners of the southern African country's vast copper and cobalt mines paid less tax to the Treasury.
Government data shows that Zambia in 2007 collected $142 million in mineral royalty and company tax from earnings of $4.7 billion in copper and cobalt exports by foreign owners of its copper and cobalt mines, which employ over 50,000 workers.
The government has been pressured by unions over the past few years to spread the gains of its copper wealth to workers in the vital industry, the backbone of Zambia's economy.
Mwanawasa said the hike in taxes sought to address those concerns as the government planned to spend the additional resources on sectors such as education and health. (Reporting By Shapi Shacinda; editing by Michael Roddy)
