Wednesday, October 2, 2013

Namibia Won’t Lower Namdeb Diamond’s Tax Rate

Namibia said it won’t cut Namdeb Diamond Corp.’s tax rate as the gem producer 50 percent owned by Anglo American Plc (AAL) pushes for a review of its fiscal regime.
“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 said in a telephone interview today. “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.”
Namdeb was in talks to cut the tax rate to 37.5 percent, the same level as other mining companies in the country, the Namibian Sun reported on Sept. 26, citing Kennedy Hamutenya, the country’s diamond commissioner. Namdeb, equally owned by Anglo American and the Namibian government, wants the tax rate reduced as it invests in technology to mine marine diamonds, Pauline Thomas, a spokeswoman for the company, said on Sept. 30.
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,” Thomas said in an e-mailed response to questions. “This fiscal regime has been unchanged for many years.”
Namdeb is engaging with the Namibian government, she said.
Namdeb produced 1.67 million carats of gemstones in 2012, of which 1.1 million carats were mined in the southwest African country’s Atlantic waters. These are home to an estimated 80 million carats, the richest known marine diamond deposits in the world, according to the company’s website

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