Namibia plans to get a larger slice out of the profits generated by mining by increasing its mining tax by 17%. Namibia is a country rich with mineral resources and a reasonably well established mining industry that already generates 25% of Namibia's revenue, mining is the single most important contributor to the economy.
The revenue boost would be huge if the recommendation of the finance ministry is accepted and the tax is hiked from the current 37.5 % to 44%.
Mining firms from abroad are exploring the south western African country for lead, gold, zinc and iron ore. Namibia is also amongst the top producers of diamonds in the world. Rio Tinto and Paladin Energy are also currently producing uranium in the nation.
The Ministry of Finance in Namibia added that the plans to increase the mining tax by 17% will not affect the diamond sector. Namibia produced 528,333 carats of diamond in the first five months of this year, a 9 percent decline compared to the same period last year. Diamond output for the year is expected to total 1.3 million carats.
The statement released by the Ministry of Finance said that the ministry has also proposed amendments to various tax laws as well as new tax legislation. The ministry also said the country faced challenges in revenue distribution from the Southern African Customs Union (SACU) pool.
While Namibia is known predominantly for its gem diamond and uranium deposits, a number of other minerals are extracted industrially such as lead, tungsten, gold, tin, fluorspar, manganese, marble, copper and zinc. There are offshore gas deposits in the Atlantic Ocean that are planned to be extracted in the future.