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