Reuters reports that British parliamentarians have invited commodities trader Glencore and other unnamed companies in the resources sector to testify next month as part of an inquiry into tax in developing countries.
Parliament’s International Development Committee monitors the work of the Department for International Development and is probing tax payments and tax avoidance in the developing world.
It has focused its investigation on Zambia, a copper producing giant where Glencore operates alongside other miners including Vedanta Resources and First Quantum.
A number of non-governmental organisations, but also Rio Tinto and brewer SABMiller, have already submitted written evidence as part of the inquiry.
Zambia is Africa’s top copper producer, but it is one of the world’s poorest countries, and its revenue from the sector accounts for barely 1 percent of government revenue. It said last month that it would audit all of its mining houses to dig for back taxes of up to $1 billion.
The committee quotes an estimated $160 billion each year lost by the developing world because of tax avoidance by multinationals.
“We are happy to take part in this inquiry, about taxation in developing countries,” said a spokesman for Glencore, which owns Mopani Copper Mines, one of Zambia’s largest producers.
“Mopani makes a major economic contribution to Zambia, providing over 17,000 jobs, paying its taxes, and making substantial voluntary contributions in education, health and infrastructure development.”
[Reuters]
*****ic glencore pay the taxes. lt also clarify tax avoidance is legal while tax evasion is what is illegal
If Mopani pays its taxes, why is it being probed? International Thief Thief, Sakara!
Black People are the easiest to manipulate
Speak for your self your wife/partner and your children.As for me and my house…
We need these companies to pay all the taxes owed as well as penalties and interest. Let this be set as an example. There is no way these companies can be operating in Zambia but maintain bank accounts with foreign countries. The minerals are sold abroad so how will ZRA know exactly how much tax these companies should pay. GRZ must come up with a deliberate policy to have all these companies bank with local banks. It is time government re-introduced externalization controls. We do not want a situation where mines only maintain payroll accounts in Zambia. If they don`t comply, please ask them to leave. We are more than happy to take back our mines after all they were fraudulently sold.
This matter is very simple. How can a company pay tax to a country which does not even know how to calculate the tax the company must pay.
It took Sweden to come and calculate the tax for Zambia. After mining copper since 1903 no one in Zambia can calculate TAX.
Sad that the PF has come out to be a dissappointment after raising hopes for a better Zambia through say increasing tax base/windfall taxes etc.Its now Donchi Kubeba on the Zambians.Its has to take UK’s parliament to question operation of these companies(Not even knowing if the inquiries are genuine or have no strings attached).Moreover,how can governmnet even demand proper tax from companies when its these companies who sponsor major events such as the just ended AFCON where First Quantum sponsored broadcasting of the tournament on ZNBC TV?Its vicious cycle
This is why windfall taxes should have been introduced by the PF govt as they had promised.
The PF has let down all those that supported them, they will break the record for becoming an unpopular party in a shortest time. Wait till the economy nose dives when the rebasing starts
exchange rate will hit K10,000 and everything will be unaffordable.
Natural resource minus human resources = Africa’s top copper
producer, but one of the
world’s poorest countries.
These are the cases that need commission of inquiries.
Sata will soon join the ranks of Mobutu seseko to become one of Africa’s worst Presidents mainly because of his short-sightedness. Tax avoidance is a criminal offence in Europe and the USA, but our ACC and DEC are busy pursuing useless political cases just to please Sata. Government must engage (NOT DAMAGE) Glencore to reach a settlement figure .
lt is PF that has put in measures to audit the exports of minerals!!!! it is mmd that who were asleep at the till
Without PF you would not even have known about all this; Your MMD were getting “nichekeleko” for political expedience and greed; thats why they removed the abuse of office clause. Some under 5 president is even supporting these blood suckers
Due to poor policies on mining by MMD 20 Years of being in power. its sad to note that in western countries a poor person cleaning streets pay taxes and in Africa Big foreign companies dont pay taxes and zambia in particular. bullshitting wasted MMD 20 years in power.
Govt gets only 1% of Cu revenue? This must be a typo?.Anyway, when it comes to tax the point still remains that ‘when in Rome investors do what the Romans do’. Whether we like it or not, this is a sad reflection of most companies in Zambia. Tip of an iceberg.
WHY DID SATA-NOKO & HIS BEMBA BUFFOONS U-TURN ON WINDFALL TAX ON MINES AFTER LYING TO THE ZAMBIANS DURING HIS CAMPAIGNS? DOES IT TAKE A PERSON IN UK TO ADDRESS THIS BROAD DAYLIGHT ROBBERY?
Because they have devised a system of collecting all the taxes transparently. Unlike those that gave a blind eye to taxation.
It puzzles me why we the British are embarrassing ourselves mingling in a third world country in Zambia, beggars belief if you ask me
Ok something made me completely agree with the topic and i quote, “Zambia is Africa’s top copper producer, but it is one of the world’s poorest countries, and its revenue from the sector accounts for barely 1 percent of government revenue”.
Says it all doesn’t, it? Now question for you all LT aficionados, how and where does this replicate the standard ratings that have been thrown around, implicating Zambia has a favorable rating economically worldwide?
Zambia is poor, riddled with self centered , egoistic leaders, whose intention is to rob the common man and the trend is here to say and thus my giving up on it
Bye Zambia, Hello Scotland,
Mushota I hear u but if we the ones with knowledge & integrity give up on zed. Whose to save the poor and helpless. True they are a lot of thieves in zed but we also have a few good men n women
For someone who claims to have CIMA and ACCA (?level ) Mushota should come up with a proper analysis of the report that talking about rainy Scotland.
Anyway,for those experts in the field,how much did the British Govt pay when it partly owned Anglo-American Corp?
Mopani bought the mines at a give away price when Zambia was desperate for a buyer.They were in Zambia for the sole purpose of getting all they could with no interest or little interest in the welfare of the workers.One official even boasted that all they were putting back in the community was less than £1000.
Now hate him or like him,you have a president who has the guts to stand up for you and ask them to pay tax, which we all do, and all your tunnel heads see is condemnation.
Its very sad indeed that it should take outsiders to tell us that we have been ripped off. You know what, it just proves one thing, our law makers are of sub standard. It is not just in this government but in previous governments as well. ZICA can you please help, you are supposed to be specialities in Zambia plus some of the people who worked in ZCCM these also would be of great value. PF government ball is now in your court, dont do what the previous government did when this question was first raised.
MMD are to blame. Glad the British govt are doing something about it.
This is just a smoke screen…TAX AVOIDANCE is a LEGAL practice around the world,UK,Europe & USA included!!multinational companies like Glencore have armies of accountants and lawyers advising them how to limit their tax liability!! wHY DO YOU THINK GLENCORE’S HQ IS IN TAX HAVEN SWITZERLAND???
Anyway,a couple of years ago,Barclays made £10b,based on UK corporation tax rate,it should have paid £2.4b (or 24%) but guess what…it paid only £114m or just 1.14!!!google also should pay 35% US corporate tax rate but pays only about 2%…so ask yourselves:
If they (multinationals) can get away in countries with sophisticated regulatory bodies,what’s to stop them pay 0% in 3rd world countries where tax officials dont even know how to use calculators??
This is just a smoke screen…TAX AVOIDANCE is a LEGAL practice around the world,UK,Europe & USA included!!multinational companies like Glencore have armies of accountants and lawyers advising them how to limit their tax liability!! wHY DO YOU THINK GLENCORE’S HQ IS IN TAX HAVEN SWITZERLAND???
Anyway,a couple of years ago,Barclays made £10b,based on UK corporation tax rate,it should have paid £2.4b (or 24%) but guess what…so ask yourselves:
If they (multinationals) can get away in countries with sophisticated regulatory bodies,what’s to stop them pay 0% in 3rd world countries where tax officials dont even know how to use calculators??
TAX AVOIDANCE is LEGAL around the world,multinationals like Glencore have armies of accountants and lawyers advising them how to limit their tax liability!! wHY DO YOU THINK GLENCORE’S HQ IS IN TAX HAVEN SWITZERLAND???
Anyway,a couple of years ago,Barclays made £10b,based on UK corporation tax rate,it should have paid £2.4b (or 24%) but guess what…so ask yourselves:
If they (multinationals) can get away in countries with sophisticated regulatory bodies,what’s to stop them pay 0% in 3rd world countries where tax officials dont even know how to use calculators??
**Barclays paid on £114m or just 1.14%!! Equally,google ought to pay 35% corporate rate in the US but had an effective corporation tax rate of barely 2%!!! This is just smoke screen coz the UK is itself struggling to raise tax from these companies that use complex accounting methods to avoid paying tax!!
Paradoxically,London happens to be the world’s capital of accountants & lawyers specializing in tax avoidance and tax havens like Guernsey,Jersey Island,Cayman Islands,British Virgin Island are ALL British territories!!UK authorities could shut down all these tax havens but they don’t coz the money saved ultimately comes back to London,in form of super rich buying football clubs,staying in Ritz,driving Bentleys etc
I think its best to put the records straight. Glencor never refused to pay any Tax in Zambia. Like any corporate anywhere in the world, tax maximization is proper corporate finance policy. Its has to be done within the law. Those of you have read the report will know that Glencor used price transferring to avoid paying more tax. The question is was it illegal under the laws of Zambia? My answer is it was not. The Swedes only highlighted that on moral grounds Gencor should avoid price transferring so as to pay more tax. The did not say Gencor did something illegal
I have said it time and again… lets not blame Glencor.. blame the Zambian government for not knowing how to put in proper Tax laws. Glencor will give a submission and it will end there
Good afternoon
What a lot of people are forgetting is that Glencore is not even a mining company. They are commodity traders who are only interested in immediate profits. They are very much in a position to manipulate Mopani’s fiscal figures in order to hide actual profits and thus evade royalties. What makes the whole thing difficult for the government to oversee is that Mopani is only a subsidiary and sells all it’s copper to Glencore.
The big fish definately has something hidden in it’s mouth. How else do you explain the fact that Africa’s largest copper producer does not even get 10% of tax revenue from copper export while Chile, which is the world’s largest producer gets not less than 20%???
@20 THE ENGINEER,
I totally agree with both of your contributions. Zambian Government seem to be lost on this one.They depend on the Ministry of mines to supply them with information and yet this Ministry is equally lost.We know that mines could be a very importance source of GVT revenue but we fail to put in place proper tax laws. Since when did we start mining copper? why not send professional to countries like Chile to learn how they do some of these things. Millions of dollars are spent on election campaigns every year but we cant spend the same amounts to train our people. Shame.
And while we seem to concentrate on copper only, many other valuable minerals such as emerald which at times sale more than diamond are also being mined in our country. How much tax do we correct from these mines? very little, if any. The PF government should be serious on this one. We need to have special departments at both ZRA and Ministry of mines to deal with mine taxation and production. Let them employ qualified personnel to deal with these Crooks.
We have for far too long been playing with kid gloves with mining investors while they ruthlessly stripped us of everything. Why does it have to take a foreigner to tell us that we are been robbed ??? We have a very self-destructive culture of PLEADING with investors when in fact they need us more than we need them. They only Zambian government that gave back to the people is the UNIP post independence government.
We need an entire change of mentality, a rediscovery of our worth otherwise we might as well just hand over the country to greedy foreigners. All those who think we owe investors anything have been dragging the rest of us down with them, This must end NOW. Zambian has enough resources to provide free education up to university with change left over
@ Muzungu anikonde.
Your utterances are very right, unfortunately we do not have leaders who actually knows how valuable copper is, I saw it in ZCCM days copper has got money we can actually be paid K2million per month all of us in the country including children with just the current production.
It is unfortunate the graduates from UNZA failed to run ZCCM.
What can the toothless British Parliament Committee going to do to these crooks one positive?? Nothing… outcome though will be that this hearing will bring pressure on these companies from its European shareholders as it is listed on London stock exchange.
African countries as one blogger have neither the capacity or the know-how to calculate tax especially if the client involved is a leading integrated commodities producer and marketer who not only produces BUT sources, processes, refines, transports, stores, finances and supplies commodities like that animal Glencore.
British Inland Revenue spent about £8million last year investigating mere individuals who were involved in dodgy tax avoidance schemes & has had a poor prosecution rate. eg. Harry Rednapp Tottenham Hotspurs coach.
* African countries as one blogger has posted…
What is the toothless British Parliament Committee going to do to these crooks?? Nothing,one positive outcome though will be that this hearing will bring pressure on these companies from its European shareholders as it is listed on London stock exchange.
African countries as one blogger has posted have neither the capacity nor the know-how to calculate tax especially if the client involved is a leading integrated commodities producer and marketer who not only produces BUT sources, processes, refines, transports, stores, finances and supplies commodities like that animal Glencore.
British Inland Revenue spent about £8million last year investigating mere individuals who were involved in dodgy tax avoidance schemes & has had a poor prosecution rate.
Please excuse the typos in my first post, I’m nursing a bad hangover!!!
It is such a relief to read most of the contributions above from Zambian thinkers!!! Imagine if we debated like this on all national matters of interest other that someone dragging us back into a medieval tribal cave.
Apart from BPBM and Mushota you guys make me proud to be Zambian.
Glencore had Mopani sell it’s Zambian copper at cost only to their subsidiary in Madagascar, which then sold it at market prices.
That is not ‘tax avoidance’, that’s tax evasion. They also violated the ‘arms length’ principle.
I say nationalize these bozos. If you are caught in tax evasion, not only should you pay back everything you stole, you should lose your license and have your mine nationalized.
Zambians must learn to fight for their land than waite for other nations to fight for you it is true that there are companies coming into Africa just to plunder and our leaders join them to do same eg RB and his team
Marc Rich (born December 18, 1934) is an international commodities trader and entrepreneur.[1] He is best known for founding the commodities company Glencore. He was indicted in the United States on federal charges of illegally making oil deals with Iran during the late 1970s-early 1980s Iran hostage crisis and tax evasion. He was in Switzerland at the time of the indictment and has never returned to the U.S.
He subsequently received a presidential pardon from U.S. President Bill Clinton on January 20, 2001, Clinton’s last day in office.
33 Pussy2,
Exactly, Glencore was founded by a crook, a convicted felon. Today it is led by his ‘luitentants’ (capos, really, to use the mob term), and they are just as criminal, if not even more so.
Did you know that the grandfather of GW Bush, Prescott Bush, was cited in the US Congress during WWII for trading with the nazis?
Or that the father of the Koch brothers, Fred Koch, before he started the ultra-rightwing John Birch Society, made a fortune trading steel with Joseph Stalin?
There is this class of international traders/criminals who act as if they are above the law, and Glencore is among them.
It is always nauseating when local politicians start making excuses for them. They should have been convicted 1000 times over.
A land of plenty but in poverty, ZAMBIA!
we are too dependant on politicians, who are not smart
right now all Sata is doing is chasing his fellow countrymen
and forgetting about foreigners stealing our wealth
” “Mopani makes a major economic contribution to Zambia, providing over 17,000 jobs, paying its taxes, and making substantial voluntary contributions in education, health and infrastructure development.” ”
Dirtbags.
Maybe I will try that line with the taxman next time. “If you employ people, and you volunteer at your church – you don’t have to pay taxes.”
Besides, Mopani was not paying taxes over the money they *laundered* through their off-shore dependance in Madagascar. That was the point of their ‘transfer pricing’ scam.
We have our own Zambian born Mr Mutati who sits in the Mopani Board. Compromised because of $$$