The Zambia Revenue Authority (ZRA) says it has resolved the US$7.6 billion tax evasion dispute with Kalumbila Mines, which is owned by First Quantum Minerals (FQM).
Responding to a press query that sought to find out how the tax dispute was resolved and how much the mining company paid out of the US$7.6 billion, ZRA spokesperson Topsy Sikalinda declined to reveal details of the settlement, saying the information was classified in accordance with taxpayer confidentiality, but revealed that some penalties were waived after mitigation.
On 18 March, ZRA announced that it had unearthed a scam in which First Quantum Minerals Limited had evaded an equivalent of US$7.6 billion in taxes.
Sikalinda had said then that the company secured and imported zero-rated equipment into the country yet they were taxable.
“We are, therefore, appealing to all other companies and players in the mining sector that may have been involved in illicit tax activities to make self-disclosure before we discover them. This will help them minimise their exposure to penalties and interests,” Sikalinda added in a statement.
Sources have told News Diggers that after reconciliation, Kalumbila Mines only paid about US$23 million to the Revenue authority as most of the claim was withdrawn and penalties were waived.
In his response to the query, Sikalinda said both the Minister of Finance and the Commissioner General were empowered to waive taxes.
“ZRA wishes to confirm that the tax dispute with Kalumbila was resolved. The details cannot be given out due to tax payer confidentiality. The Act allows both the Commissioner General and Minister to wave penalties, and some penalties were waived off after mitigation,” he stated.
Asked if ZRA had resumed paying new VAT refund claims after the Sales Tax Bill was withdrawn from Parliament, Sikalinda said the Commission was paying over K800 million in tax refunds per month.
“ZRA refunds about K800 million every month to tax payers. While for those who are owing, the authority offsets the bills,” he said.
On allegations that ZRA had single-sourced an internationally discredited Brazilian company called CSICPA to procure digital tax stamps meant to curb cigarette smuggling, Sikalinda said the company only expressed interest along with 8 other companies.
“Contrary to social media reports, it is not a tender but an expression of interest which was published in the press. We can confirm that 9 expressions of interest were received and they are still at evaluation stage. There is no contract given to anyone. The authority has noted that when ever an expression of interest or tender is advertised, there is rival battles that come to play amongst these companies which is very sad,” said Sikalinda.