…all foreign multinational mining corporations in Zambia, including KCM, which Vedanta Resources has just re-acquired have been awarded tax holidays
By NATION REPORTER
ZAMBIA is losing an estimated US$3 billion annually from the mining sector through tax avoidance, price transferring, tax refunds, capital flight, externalisation of profits and illicit financial flows, Antonio Mwanza has claimed.
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And Mr Mwanza says all foreign multinational mining corporation in Zambia have been awarded tax holidays, including Vedanta Resources that has just re-acquired the Konkola Copper Mine (KCM).
Mr Mwanza, the Socialist Party deputy secretary general says it is not correct for the government to claim that Vedanta would not be awarded the tax breaks because in the 2021 national budget, it had been announced that foreign multinational mining investors had been awarded tax holidays.
He said in the 2022 national budget, the UPND government gave foreign mining companies tax holidays by reintroducing deductibility of the mineral royalty tax.
Mr Mwanza said Mines Minister Paul Kabuswe was being untruthful by claiming that Vedanta Resources would not be given Tax Holidays because Finance and National Planning Minister Situmbeko Musokotwane in his 2021 budget had decreed tax breaks for all foreign multinational mining investors in Zambia. He said tax holidays announced by Dr Musokotwane in the UPND government inaugural budget in 2021 had included all foreign mining companies at the time and those that would have to come later.
Zambia is losing an estimated US$3 billion annually from the mining sector alone through tax avoidance, price transferring, tax refunds, capital flight, externalisation of profits and other illicit financial flows.”
“In case Mr Kabuswe does not know the taxation regime the Ministry of Mines is implementing, let him know that the UPND government has given tax holidays to all foreign multinational mining corporations. These tax breaks are applicable to all foreign mining firms operating in Zambia, Vedanta (Resources) inclusive,” Mr Mwanza said.
“In 2021, Finance Minister Situmbeko Musokotwane in his first budget presentation under the UPND administration, announced the introduction of tax breaks for mining companies, making Zambia keep losing hundreds of millions of dollars annually in unpaid mining taxes,” he recalled.
Mr Mwanza said the government had further given foreign mining companies more tax exemptions by suspending import taxes on mining equipment and machinery, thereby making Zambia lose even the little revenue it was collecting from the mines.
He has called on government to cancel what he termed economically insane tax breaks given to foreign mining companies currently ripping the country off billions of dollars at the expense of the country.
Instead, give tax incentives and tax holidays to our own Small and Medium Enterprises (SMEs) that are struggling and folding due to high taxation, lack of tax incentives, lack of liquidity, high interest rates, high inflation, currency volatility, high cost of doing business, general economic hardships and an unfavourable working environment,” Mr Mwanza said.
He said almost all major and minor government contracts and payments were allegedly going to foreigners at the exclusion of local businesses, thereby worsening the already desperate youth unemployment levels and crowding out local SMEs which he said were critical to job creation and alleviation of poverty.
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