Opinion

TREACHEROUS MINES


WE are not surprised that some mining companies have been sending large sums of money to offshore jurisdictions while declaring losses to evade tax.

These mining firms have been acting with impunity taking advantage of the government’s ‘off hands’ approach to the mines.

But the damning report from the Financial Intelligence Centre should dismiss all doubts that these mining firms are not here to develop the sector and the country at large, but to get the most of our meagre resources.

It is scandalous that the mining firms, while always complaining about the “high” taxes have in fact been milking the country out of billions through fraudulent schemes.

According to the 2019 Financial Intelligence Centre 6th Money Laundering and Terrorist Financing Trends Report, some mines in the country are repatriating proceeds to offshore jurisdictions while declaring losses to evade tax.
The report also disclosed that some precious stones and base metals that were exported to foreign jurisdictions were undervalued.

If anything, the FIC disclosures should shame the doomsayers who have been criticising the government over its dealings with Mopani Copper Mines.

The conduct of the mining companies borders on treachery to say the least. There is not a mining firm operating in the country that can honestly claim to be operating above board.

The firms have at every turn used loopholes in the taxation system to avoid paying what is due to the government.

As we have noted before, it is an established fact, proved in the country’s highest court – Supreme Court – that some mining firms have been playing double standards in their dealings with the Zambia Revenue Authority.


Their treachery came out in the open when the Su- preme Court charged Mopani Copper Mines US$13 million after it established that the firm colluded with its parent company Glencore International AG to underval- ue the price of copper.


Since 2008, the mining companies have either been refusing or have failed to provide required documentation for them to claim VAT on their exports of minerals.


According to our investigations, it was impossible to export copper from Zambia to anywhere in the world without documentation, as a result mining companies have been refusing to provide documents because prices declared to ZRA at the time of export and on which basis taxes were to be paid were far much higher than the price they actually charged for the same minerals when sold in foreign countries.


Their actual fear was that, if genuine documents were used, ZRA would impose additional taxes, interest and penalties.


Is it not because of cheating by mining companies that Government acted, showing its determination to the scourge by imposing tougher testing measures to stem the submission of low-grade samples to undervalue mineral exports and consequently, loss of revenue earned by the government through mineral royalty tax payment?


This is exactly what the FIC report has again brought out – that some precious stones and base metals that were exported to foreign jurisdictions were undervalued.


What the FIC report proves, with backing from the Supreme Court ruling is that the mining firms must not be treated with kid gloves because they are prepared to cheat at every turn smiling all the way to the banks while leaving Zambians in misery.

Related Articles

Check Also
Close
Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker