Zambia has decided not to relaunch a 25% mining windfall tax, a move that will see it continue imposing existing mining taxes over the long term.

Zambia Finance Minister Situmbeko Musokotwane said the main reason behind the decision was that the windfall tax could force some mining companies to shut down, according to Reuters.

“Mining companies required time to recover from losses incurred due to heavy investments in equipment before higher taxation could be enforced,” Musokotwane said.

“Even though copper prices had increased, the government would not reintroduce high mining taxes that it had earlier scrapped as that could hurt the country and investors.

“If we impose tax on revenue on old mines they will end up closing and we don’t want to head in that direction.”

Zambia has been waiving a 25% import tax on imported equipment and 16% value added tax for overseas companies investing in economic zones in order to draw additional investment and generate employment.