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Add value or pay more taxes--SPYL.

Firebrand Swapo Party Youth League secretary for economic affairs, Veikko Nekundi has warned mining companies that they risk paying more taxes if they don't add value to minerals before exporting them.

Nekundi said this on Tuesday at a stakeholder workshop organised by the Chamber of Mines of Namibia to discuss benefits of the mining industry to the country.

He said: "It should be noted that no mineral is consumed as a final product without value addition, therefore, Namibian mining companies dealing with uranium, copper, manganese and gold can still add value on their mined commodities. Either that or pay more taxes.

"Our problem with mining companies is that they are careless about Namibia and purely want to enrich their home countries at the expense of the host country.

"They behave as if they are ruling us and we must adhere to what they want. This is uncalled for, and if our current leaders in government continue to accept such attitude when our time comes, it will be a different ball game, they must be rest assured," Nekundi threatened.

The youth league leader charged that mining companies were only interested in depleting the country's mineral resources without developing the local economy.

"These mining companies are only here to finish our resources while resources from their home countries are reserved and as such we will be forced to beg them. It is equally a shame that for many years these entities have failed to develop local sub-contractors and to assist in the establishment of factories to produce finished products from what is being mined."

Quoting one James Otto, economist Robin Sherbourne during a presentation on behalf of the Chamber of Mines said that "any increase in taxation, other than a well-crafted excess profits tax, could shift the fiscal system into a "high tax" jurisdiction which over the longer run, could result in lower government revenues as companies seek to invest their capital elsewhere."

Sherbourne said that if government had not backtracked on the proposed controversial tax reforms, Namibia would have become one of the countries with a higher tax regime in the world which would have resulted in the closure of mining companies.

However, Nekundi quipped: "What I know is that Namibia is not number one on that list. Why are they (mining companies) not closing in the country which is number one and why are they not running away from investing in such a country?"

Nekundi questioned Sherbourne's assertion that 90% of mining companies revenues are costs: "I want to ask anyone on this earth as to who will want to invest his hard earned money in an enterprise whose costs are so high? No one will do that, it's a fact. Not even a bank will finance such a venture. Therefore this is a fake fact aimed to justify their cry.

"Further you should take note that even Langer Heinrich Mine contributed the most to the total revenue of its mother-company."

By Nyasha Francis Nyaungwa

subeditor@economist.com.na
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Author:Nyaungwa, Nyasha Francis
Publication:Namibia Economist (Windhoek, Namibia)
Geographic Code:6NAMI
Date:Sep 30, 2011
Words:499
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