GOV’T EXPECTS 60% MINING TAXES IN USD, 25% IN KWACHA, 15% IN YUAN

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Posted by admin on January 7, 2026 at 9:30 AM

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The Government of Zambia has clarified its new mining tax payment structure, confirming that in 2026 it expects 60 percent of mining taxes to be paid in US dollars, 25 percent in Kwacha, and 15 percent in Chinese yuan (Renminbi).

Minister of Finance and National Planning Situmbeko Musokotwane explained that the measure is a cost-saving and debt management strategy, not a shift away from the Kwacha, which remains the legal tender for domestic transactions.

Taxes are ordinarily payable in Kwacha, but the government may designate other currencies for specific sectors to ensure macroeconomic stability mirroring the 2018 and 2020 decisions requiring mining companies to pay certain taxes in USD. In 2025, about 75% of mining taxes were paid in USD, 25% in Kwacha, and 2% in Renminbi.

He added that China is Zambia’s largest bilateral creditor, with most loans denominated in Renminbi, allowing mining taxes to be paid in RMB helps Zambia service debt directly in the borrowed currency, avoiding conversion costs and settlement delays.

“Allowing a portion of taxes to be paid in Renminbi enables the government to avoid unnecessary conversion costs,” Dr Musokotwane said.

Dr Musokotwane emphasized that the arrangement is limited and targeted, applying only to mining companies with strong links to China and Ordinary citizens will see no direct impact, but government savings can be redirected to health, education, and social support.

He concluded that Domestic transactions will continue to be settled in Kwacha, ensuring monetary policy remains intact. The Renminbi already forms part of Zambia’s foreign reserves and is included in the IMF Special Drawing Rights (SDR) basket and  Reserve management involves balancing risks, with no currency or asset being completely risk-free.

Governor Denny Kalyalya said holding RMB strengthens the stability of the monetary system.

“Having multiple foreign currencies available reduces over-reliance on the USD and other single currencies. It gives the Bank more flexibility to manage liquidity and stabilise exchange rates,” he explained.

He reaffirmed that domestic monetary policy remains fully effective since local transactions continue to be settled in Kwacha.

The government’s mining tax currency mix reflects a pragmatic approach to debt servicing, foreign reserve diversification, and macroeconomic stability. Officials pledged continued engagement with stakeholders as circumstances evolve.