GOVERNMENT has dismissed claims by First Quantum Minerals (FQM) that Zambia has the highest fiscal regime for the mining sector globally, challenging the company to substantiate its claims with reputable publications.
Deputy Finance Minister Miles Sampa says Government is working with the Zambia Revenue Authority to ensure that there are no income leakages from the mines.
Mr Sampa was reacting to FQM’s head of tax Adam Little who, in an interview with Daily Mail this week, stated that the tax rates applicable to the mining industry in the country are the highest in the world.
In an interview, Mr Sampa said a holder of a mining right is exempt from customs, excise and value added tax duties in respect of all machinery and equipment required for exploration or mining activities.
“Mr Little sounded more of a politician than an expert. His claims are unsubstantiated and as an expert in tax he should be factual,” he said.
Mr Sampa said mining companies should not claim pay-as-you-earn (PAYE) as part of their taxes as this is paid by workers.
In a separate interview, University of Zambia, School of Mines lecturer Mattias Mphande said mining companies should open up their books for public scrutiny.
Dr Mphande said Zambia’s taxes are the lowest compared to other mining countries such as Australia, Canada, Botswana and Namibia.
He said Zambian mines enjoy 10 years tax holiday, 100 percent capital allowance as an investment incentive, reduced customs duty on heavy fuel oil from 30 to 15 percent.
Dr Mphande said Zambia’s tax is very low compared to Australia that has introduced a windfall tax at 40 percent.
“The mining sector’s contribution to treasury is very low in totality, they pay low electricity rates. If they import fuel, it’s duty free while Zambians pay excise duty,” he said.
Dr Mphande said the wages and salaries paid to Zambian mine workers are very low compared to the Democratic Republic of Congo and Malawi.
“PAYE is tax paid by workers and when this is removed from their tax bracket, the mines contribute very little to the treasury,” he said.
He said it is sad to note that in all places where mining activities have taken place in Zambia citing the Copperbelt and now North Western provinces, people are poorer compared to places where there are no minerals.
[Zambia Daily Mail]
all those looters are abject.
transfer pricing, cash cost maximisation, cash pooling, bribes,…
they already cut our fingers and arms !
what they want? our head??
How does this Mr Little complain about PAYEE as if its his money?! This money is deducted from the workers’ salaries. During the time of ZCCM, the copperbelt benefited a lot from the mines and the townships were the cleanest in Zambia.
These companies just want to be running away from paying taxes to govt hence coming up with un substantiated claims.
These companies should not forget that we have a competent government in place. Look at the credibility and competence of Hon. Miles Sampa, this is more reason why you able to see kwacha competing favorably and the economy booming.
So please comply with all the requirements.
Listen to the doc from our uni govt….
Mphande, you were in Chiluba’s MMD govt as Minister of Mines, what did you do to improve Zambia’s revenue from the mines in view of all this data that you have?
N° 4, Chiluba dropped Mpanda because he advocated for unbundling of Mines whilst Chiluba opted to give the whole package to Angloamerican and boom, they left the mines in a mess. Mwanawasa unbundled the mines to the highest takers.
You are mixed up in your history. The mines were unbundled – hence Mopani, KCM, Chinese Chambeshi, First Quantum etc. It was the Kafue Consortium that wanted to buy the whole lot and Chiluba refused (wisely in retrospect when you see what AngloAmerican did to KCM). I don’t know what Mpande did but he clearly was ineffective and did not impress the tribalist Chiluba.
#3 @ Mr Hamiyanze
“These companies should not forget that we have a competent government in place. Look at the credibility and competence of Hon. Miles Sampa”
we know former gvt was completely rotten, but PF govt seems to be very lenient specially Mr Sampa. Why does he close his eyes on Mopani (Glencore) scam ???
AT LEAST $ 500 MILLION EMBEZZLED !
Is it a deal between govt and mines companies, on the one hand investments and employment, on the other hand complaisance and “passiveness” OR WORST??
——
According to NGOs in its pilot audit by Grant Thornton, Zambia and Econ Poyry, Zambia lost an estimated income of USD 175 million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.
continued
Copper from Mopani is sold under a contract with copper in one instance being sold at 25 per cent of official prices at LME. In other words, they are not paying taxes over 75% of the copper sold to Glencore.
Moreover, in the report by Action Aid, which Mopani has described as flawed and incomplete draft added that the Zambian government (ZCCM-ih) , may probably be losing USD 50 million annually on dividend payments from its 10% stake in Mopani Copper Mines.”
and in the same time Zambia needs to borrow $700 million eurobond…
WHERE IS THE COMPETENCE ??
No.4 No.6 Man ensured he got scholarships for all three daughters using the Ministry when only one really made it…..the other was unza open now widowed….he joined mUtesa as the campaign manager
Please dont listen to this devilish captalists. Theirs is milking and milking without taking care of the cow. Just ignore tese Vampires.
MOST OF THESE FOREIGN COMPANIES/CORPORATES BRING IN MANAGERS FROM THEIR COUNTRIES WHO ARE NOT FULLY EDUCATED AND EXPERIENCED TO MANAGE ZAMBIANS MOST OF WHOM ARE VERY EXPERIENCED AND HIGHLY EDUCATED. HOW CAN HEAD OF TAX (AN EXPERT) NOT KNOW THAT PAYE IS NOT PAID BY THE EMPLOYER BUT BY EMPLOYEES? EVEN THEN HOW CAN AN EXPERT FORGET ALL THE FREEBIES THAT THEY ENJOY? BRINGING TO ZAMBIA EXPERTS WHO WEREN’T EXPERTS AT ALL IS ANOTHER BONE OF CONTENTION. THE GOVT SHOULD LOOK INTO THESE SO CALLED EXPERTS FROM CHINA AND THE WEST, ETC.
Mpande and Sampa check your facts. Botswana is more progressive tax wise on mines than Zambia. Botswana is number 1 in Africa on attractiveness for mining companies. Zambia does not even compare. Duty free capital items do not make money on their own. They have to be utilised in mining to produce revenues. There is no 10 year tax free period. In fact mining tax losses are not carried indefinitely in Zambia like they do in Botswana. All in all, Botswana is a much more progressive country than Zambia. Zambia should continue consorting with and comparing against Zimbabwe, the failed country.
@ Mike Te, thank you for your observation, now matter will be active in our reserch I can asure you that as soon as I get the neat greties about Mopani, we will give you a credible response.
Hon. Miles Sampa is a reputable financial ex part who has a serious financial background and now now considering the back-load of work left by the previous regime, he has a lot to clean, am sure he has not closed his eyes as per say. Rest assured that the economy of Zambia is in safe hands.
These mines are contributing nothing directly to the treasury. Its only the associated industries that are contributing to the treasury. The mines should start paying the 30 corporate tax like other businesses and No tax holidays and these useless incentives. Chile is getting enough revenue from copper than we are. Zambia is Africas biggest copper producer but has nothing to show for it. Anyway, even Nigeria is Africas biggest oil producer but they only have poverty to show for it. Whats wrong with us Africans?
This is a joke! A head of tax who is a foreigner? ZICA allowed this?
Mr. Minister your boss (Chikwanda) was on TV last night talking about ZICA celebrating 30 years. This Adam Little is practising TAX illegaly in Zambia. He is not registered with the institute. Arrest this chap!!!!
@ Mr Hamiyanze
Former govt was rotten so I support PF gvt but I m impatient
I know the cleansweep is hard and long but PF govt has to set up that plunderer as an example for the others and thus Zambian people will be aware of the change
Mopani is a symbol !
Use google to understand
scribd.com/doc/48560813/Mopani-Pilot-Audit-Report
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owni.eu/2011/04/12/exclusive-ngos-report-mining-giants-glencore-and-quantum-alleging-fiscal-crime-in-zambia/
–
postzambia article 18078
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scribd.com/doc/48560609/Mopani-is-Dodging-Taxes-joint-CSO-Press-Release-in-Zambia
Hon Sampa you have an (hidden) agenda, you are a (donchi kubeba) and a branch of the family forest, can any sane person who lived through the 90 days promises of 2011 believe you?
This LITTLE guy is just a capitalist sucker