The Centre for Trade Policy and Development has called on the Zambia Revenue Authority to give an update on the tax evasion scam involving First Quantum Minerals (FQM).
Early this year, on the 20th March 2018, the Zambia Revenue Authority disclosed that it had uncovered a tax evasion scam in which a mining company evaded paying taxes worth K76.5 billion or the equivalent of about $7.5 Billion.
CTPD Executive Director Isaac Mwaipopo said after number of speculations from various sections of society, his organisation observed a response from FQM refuting the tax assessment issued by ZRA.
“The Zambia Revenue Authority in that briefing informed the nation that the amount accrued resulted from the mining company dodging taxes by avoiding paying import duties on consumables and spare parts which it classified as mining machinery when in fact they were not, thereby unlawfully incurring a zero percent duty as by the Zambian tax law. This, according to ZRA was what transpired in the last 5 years. Later, the mining company came out to indicate that the amount disclosed by ZRA was not a true reflection of what the company owed the revenue authority.”
Mr Mwaipopo said FQM further indicated that the assessment did not have any discernable basis of calculation and was to continue working with the ZRA in resolving the case.
“Our concern and expectation is that ZRA would be updating the nation on the issue, as it is a serious matter, especially when we look at the prevailing challenges the country is facing when it comes to financing local development. It has been over a month now and the Zambia Revenue Authority has not made a single announcement on the issue, people need to know how far the investigations have gone,” Mr Mwaipopo said.
“It is often the outcome that such cases pass in silence and the matter easily gets wiped from public conversation, but $ 7.6 billion is too big an amount to be forgotten, this amount is over 5 times what the nation has been struggling to obtain as loan from the International Monitory Fund, this amount could finance the entire 2019 budget.”
Mr Mwaipopo urged the ZRA to continue treating this case with the seriousness it deserves as it will set precedence over how subsequent cases could be dealt with.
“We urge all citizens to get involved in demanding for accountability, this is the only way we will build a strong and resilient economy,” he said.
CORRECT…. CAN ZRA UPDATE US ON THE CURRENT POSITION.. WE DONT WANT SECRET NEGOTIATIONS…AS MATTER OF FACT, THERE IS NO NEED FOR NEGOTIATIONS, MAKE THEM PAY THE MONEY.
Salute Mr. Isaac Mwipopo.
ZRA shall widen the net and include all mining houses (told KCM is using their Dubai Office for the same transfer pricing mechanism as was done by FQM).
All foreign banks and foreign owned insurance companies are doing the same.
Billions transferred without paying a dime to ZRA.
Do not expect anything from UPND $5 billion HH-man.
Do not expect anything from Mr. 10% Lungu.
Do not expect anything from Mutati, $2 million bribe man.
Sometimes I even wonder why we bring up these issues. We all know who is stealing and he won’t even say anything about the allegations. Because tumutambafye, he knows there’s nothing we can do.
Young men what do you know ba Mwaipopo naimwe. The figure itself was a dream and there was no basis for that calculation. How many companies are even worth that much. What is the net worth for FQM?. Can’t you just see that that was too much money to be true?
ZRA now feels ashamed to have told the public something for which they had no proof.
Zambia (ZRA) now owes FQM for reputation damage. That figure has evaporated.
Salute Mr. Isaac Mwipopo.
ZRA shall widen the net and include all mining houses (told KCM is using their Dubai Office for the same transfer pricing mechanism as was done by FQM).
All foreign banks and foreign owned insurance companies are doing the same.
Do you get paid to cut and paste PF agenda on social media?
Ever heard about Father Google?
Google and find how much is FQM worth. You will be shocked of the robbery they are involved in.
Banks and insurance companies are also involved in big way. Management fees, commissions are easy way to take profit out without paying a single dime to ZRA.
@2 Chitapankwa.. DID EVER HEAR FQM says that figure was dreamt?? All they say is that ZRA did not consider certain documents that is all!! In fact they admitted recently that they will pay a much less amount after all reconciliations are done!! SO WHY AGREE TO PAY WHEN YOU THEY DON’T OWE?? TAXATION DEBT DOES NOT ALWAYS HAVE TO BE EQUIVALENT TO COMPANY OR INDIVIDUALS’ NETWORTH, that is why they file for BANKRUPTCY WHEN LIABILITIES GET OUT OF HAND!! The due taxes on FQM come from OWING PRINCIPLE DEBT, PENALTIES, INTEREST ON PRINCIPLE and PENALTIES, THEN COMPOUNDED OVER A NUMBER OF YEARS something like 5 YEARS!! Our rate of interest in Zambia on average is very high there a principle amount of US$150 can reach Billions of $s as already explained!!
Issue based discussions. Well done Isaac Mwaipopo. A bird in hand is worthy two in the bush. We have resources which we deserve and the legal battles are easier than those involving defaulting of debts. Why are we so slow where we have an advantage? This case well done ZRA must be followed up transparently. last time we had to be rescued by a French organisation showing because of cheap values creeping into our focus we have lost a lot and our people are poor for a reason not of their own. Hey but ZRA unearthed this so a pat on the back we are getting somewhere.
ZRA shall widen the net and include all mining houses (told KCM is using their Dubai Office for the same transfer pricing mechanism as was done by FQM).
All foreign banks and foreign owned insurance companies are doing the same.
1,139,062,500
That is your number at 50% interest for your principle (150m) for a period of 5 years. At what rate is the ZRA interest calculated.
What was the penalty and what is the interest paid on the penalty?. Zambia should now reach a stage where we can argue with numbers.
As of 31st Mart 2018, GRZ owes (271m Kansashi + 78m Kalumbila USD) in VAT
If for arguments sake, I tell you that penalties are as 100% of the principle amount and then penalties are added to the principle figure and the total amount is compounded at the average interest per each month that passes without redeeming the due amount for taxes. How much would arrive at if each month has an interest rate as high as 8% for 5 years? If ZRA owes them VAT refunds that does NOT give them power to cheat on taxes!! Let them go with a CLEAR CASE and demand TAX OFFSETS!!
For argument sake indeed
Good question to ask not the one HH asks.