The government of Namibia has withdrawn its proposed mining tax hike. Earlier in the year the Namibian government had announced a proposal to raise the mining tax rate to 44% from its current rate of 37.5 %. The Deputy Finance Minister of Namibia, Calle Schlettwein, said that the proposal had been withdrawn to increase the corporate tax on mining companies.
Namibia is the largest miner of offshore diamonds in the world and also the world’s fourth-largest uranium producer. It is also rich in gold, coal and copper. While diamond mining companies are already taxed at 55% the increase in taxes would have led to a considerable nest egg for the government.
However now they have decided to propose a windfall tax as per Schlettwein when the international prices for commodities are high. He did not give any further details when he made the announcement in the capital city of Windhoek. The reporters were given no indications to the rate of the tax or the price level at which it would become applicable or when exactly the tax was likely to be introduced.
The move from the government to withdraw the proposed tax hike has come following protest from the Chamber of Mines and the Namibia Chamber of Commerce and Industry. The opposition to the proposal announced on July 22, 2011 for raising corporate tax rates for mining companies other than diamond producers has forced the government to this decision.