Namibia Seen Unlikely to Reduce Tax Rate on Miner Namdeb

(IDEX Online News) – The Namibian government has rejected an appeal by Namdeb Diamond Corp to slash its tax rate.

Namdeb, jointly owned by Anglo American Plc and the government of Namibia, wants the tax rate cut to 37.5 percent, the same level as other mining companies in the country.

“The Namibian diamond mining fiscal regime is one of the highest in the world and goes beyond the tax rate of 55 percent on profits as it also includes a royalty of 10 percent on turnover,” Pauline Thomas, a spokeswoman for the company, told Bloomberg News. “This fiscal regime has been unchanged for many years.” The miner wants the tax rate cut since it invests large sums in technology to mine marine diamonds.

However the government is unlikely to budge on the issue despite ongoing talks. “We can’t entertain an idea that diamonds should be taxed at the same rate as other mining companies,” Namibia’s Finance Minister Saara Kuugongelwa-Amadhila told Bloomberg News.

“We made a conscious decision to set the tax rate at 55 percent because those diamonds are highly valuable and Namibians should share in the benefits,” Kuugongelwa-Amadhila added.

Namdeb produced 1.67 million carats of diamonds in 2012, of which 1.1 million carats were mined in the southwest African country’s Atlantic waters.