ECONOMIST Trevor Hambayi says government’s move to accord mines deductible mineral tax is a hopeful strategy but it might affect the budget extensively if it fails to work out.

In an interview, Monday, Hambayi said he hoped the strategy would work.

“The proposed tax revenue they were going to raise from mineral royalty tax was K5.6 billion. And in the 2022 budget, they have obviously accorded the mines deductible mineral tax, which basically should have reduced the tax that they are going to generate but they are proposing that they are going to raise this to 12.7 billion. From what I see is that the government is probably thinking on the basis of the fact that they are going to increase production from the current 800 million to a figure that is going to allow them to get to around 1.5 billion or something, so that they can then raise tax from there,” said Hambayi.

“It’s a very hopeful strategy that they are taking and I hope that it works because the 12.7 billion is 10% of our domestic resource revenue and that if it doesn’t happen it’s going to affect the budget quite extensively. But generally speaking, I think it’s very hopeful to think that we can give the deductible mineral tax and hope that we can increase the tax revenue we were collecting from this sector. The only possibility that it comes to be able to raise that kind of money is if we increase production. But I don’t know whether we have done everything that is required right now to be able to achieve that kind of increase in production by 120%.”