The Centre for Trade Policy and Development has demanded for an update on the alleged tax evasion scam involving First Quantum Minerals Limited announced by the Zambia Revenue Authority in March.
On March 20 this year, ZRA announced that it had uncovered a tax evasion scam in which Kalumbila Minerals Limited, an FQM subsidiary, allegedly evaded paying taxes worth K76.5 billion.
In a statement to News Diggers!, Monday, CTPD executive director, Isaac Mwaipopo, demanded that the ZRA should frequently update the nation on how far they have gone to resolve the matter because K76.5 billion was too big an amount to be easily forgotten.
“CTPD calls on the ZRA to give an update on the tax evasion scam involving FQM. Early this year, on the 20th March 2018, the ZRA disclosed to the Zambian people 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 US $7.5 billion. After speculation from various sections of society, we observed a response from FQM refuting the tax assessment issued by ZRA. The ZRA 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 per cent 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. The mining company further indicated that the assessment did not have any discernible basis of calculation and was to continue working with the ZRA in resolving the case.”
He said the matter was critical, adding that ZRA was expected to treat it with the seriousness it deserved.
“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 ZRA has not made a single announcement on the issue; people need to know how far the investigations have gone. It is often the outcome that such cases pass in silence and the matter easily gets wiped from public conversation, but US $7.5 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. CTPD further urges 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,” appealed Mwaipopo.