GOVERNMENT says the country’s tax regime should be flexible to allow mining companies to acquire information and communication technologies and help the sector to embrace the Fourth Industrial Revolution.
The revolution conceptualises rapid change to technology and social patterns and processes in the 21st century due to increasing inter-connectivity and smart automation.
Secretary in the Mines and Mining Development ministry Pfungwa Kunaka recently told NewsDay Business that the country had no choice in embracing the Fourth Industrial Revolution.
“We have no choice whether we have capacity or not. We have to start somewhere in terms of your investment and Fourth Industrial Revolution capacity. Government policies need to be supportive,” he said.
“In this instance where we are talking about increased utilisation, you need to ensure that your taxation is favourable and there are incentives to ensure that you are able to acquire ICT. We also need to look at labour laws. If you have new technologies replacing manpower you need to look at how the termination of those contracts are be handled.”
This comes at a time when the mining industry said it needed in excess of US$1 billion in 2023 for retooling alone despite the country being in the throes of foreign currency shortages.
Government and industry needed to collectively and quickly formulate polices that are responsive to the dictates of the Fourth Industrial Revolution, Kunaka added.
He said although the taxes were favourable in terms of supporting the mining industry, there was a need for the duty charged on the importation of new technologies to be looked into.
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“The taxation is favourable in a number of ways, especially in terms of supporting the mining industry. There are a lot of incentives which are there. We need our taxation to be sensitive to that. The importation of new technology means that the issue of duties is looked into,” he said.
Kunaka said there was a need to have tax incentives that atract foreign direct capital, including expatriates needed to provide expertise.
In his 2023 budget statement, finance minister Mthuli Ncube said the mining sector was expected to grow by 10,4% in 2023, underpinned by anticipated favourable international mineral prices, as well as increase in investment, especially in exploration, mine development and mechanisation.