ActionAid International Zambia Country Director Pamela Chisanga has maintained that the new investigation carried out by her organization which has exposed Zambia Sugar Company’s tax avoidance is a true reflection of the situation on the ground.
Speaking at a public forum in Lusaka this morning, Ms. Chisanga said the report on the avoidance of tax by Zambia Sugar is not a fabrication of facts but exposes a serious anomaly that needs to be addressed.
Ms. Chisanga said that the report which is a result of experts going through the records of the multinational company and tracing its activities both locally and internationally provides an example of how the country is losing revenue through tax avoidance by big multinational companies.
She said there is need therefore for government to ensure that investors in the country live up to their obligation of remitting taxes.
Ms. Chisanga said that particular attention must also be paid on formulating mechanisms that will seal loopholes for tax avoidance.
Speaking at the same occasion, Center for Trade and Policy Development (CTPD) Executive Director Savior Mwambwa said Zambia has had various reports similar to the one released by ActionAid.
Mr.Mwambwa observed that going forward; Zambians must take up the challenge of ensuring that they pressurize government to formulate strict legislation to seal loopholes in the taxation system.
And an academician from the University of Zambia Dr. Mathias Mpande says tax avoidance is not a responsible way of running any government and that no country can negotiate with the private sector on the basis of taxation.
[pullquote] Banking giant Barclays is today expected announce the shutdown of its tax avoidance unit, which gave advice to large companies on how to avoid paying out tax[/pullquote]
Dr.Mpande said that there was need to stop the siphoning of money drawn from Zambia’s resources.
Meanwhile, Youth Vision Zambia Executive Director Amos Mwale has said that the blame game should not arise in the Zambia Sugar tax avoidance case.
Mr. Mwale told Qfm news that there is need to establish how the institutions mandated to collect taxes in the country failed to detect the anomaly.
He said that Zambians are yearning for a clear explanation from government and Zambia Sugar Company in order to settle the dust.
Meanwhile, Banking giant Barclays is today expected announce the shutdown of its tax avoidance unit, which gave advice to large companies on how to avoid paying out tax.
It is thought new chief executive Antony Jenkins will reveal his plans to repair the bank’s battered reputation and overhaul its culture and practices following a string of damaging scandals today.
The scandal-hit bank is also due to deliver its annual profits and the long-awaited results of a strategic review.
Mr Jenkins is expected to say on today “There are some areas that relied on sophisticated and complex structures, where transactions were carried out with the primary objective of accessing the tax benefits.
“Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again.”
This has been happening all the times and will continue happening.It is usual for big corporations to steal countries resources by taking advantage of the individual country’s weak laws.Zambia sugar is not the first one nor will it be the last.Check out a documentary on you tube which was shot in Luanshya titled “Good copper, Bad copper”.
We should surely put the blame on ourselves and not Zambia sugar.It is our laws which are weak.
Dear Zambians,
I think we need to move on.
I am sick and tired and I am developing withdrawal symptoms from LT because of late
We have heard about dual carriage ways, airport creations when in essence we are a third world country
Corrupt from the top riddled with arguably unprecedented debt. Debt big enough if changed to equity
Would make Zambia a first world country
You see what upsets me and churns my stomach to a grinding agony is this idea that Zambia after allowing
Foreigners to control your country is seen as ‘doing well’
I feel like pulling someone’s ears like what they used to do to me in primary school, so you can see that your country
Is falling badly, and trust me when I say that I am CORRECT
Thanks
Please Mushota, can you improve your English. This drivel doesn’t make any sense.
Yeah Mushota, Your English.. Eish. Just keep it simple!
English, ?
Those in glass houses? someone finish that for me…
I am a PhD student wit the following, MSc, MBA FCMA, FCCA, Bsc (Oxf Brooks), and a PhD student.
In other ways stop criticizing me, your hands are too short to fight with God!
Thanks
I chisungu ba mushota. Ninshi teti mubonfeshefye icibemba. We can still get what you are trying to communicate even through our local language.
hey Mushota, your English vocabulary has really improved lately…..
Mushota says “Debt big enough if changed to equity
Would make Zambia a first world country”. Mushota, Zambia’s external debt stands at about US$2 billion after debt cancellations not too long ago. Is this statement you copied from the “Economist” magazine applicable to Zambia really? If so, ask your PhD supervisor to replace you with someone original and n ot a copy cat of the “economist”.
@Mushota#2.3&2
How are you?
Its your boy, you know who, alright.
What is this business of describing yourself as a PhD student? If you are doing your Doctorate Thesis as part of your university degree or pursuing your doctoral studies then you are not a ‘student’ but a more correct term to use is a ‘PhD candidate’
…. “a ‘PhD student’ wit the following”….. What is this?
Wit is the capability to utter something surprising and clever or prepare written work which is amusing and intelligent.
Why don’t you proof read? Or edit what you write. Edited work before it is published, leave out irrelevant parts or add necessary stuffs
A few days you have not commented on this site had seen sanity.You are back again with your PhD pride?Even my grandma in the village without a PhD can talk sense.Anyawy………..???????
If at all you were qualified as you claim in those subjects, this would have been the ideal topic for you to comment sensibly. But we all know you are just a troll and a fake boy.
Mushota,
What’s the difference between tax avoidance and tax planning?
Tax avoidance is being clever in not paying tax. Tax planning is Paying tax but in a more astute efficient but more beneficial to your allegiance
Thanks
You always brighten up the blog!! You are an asset to LT.
Pamela Chisanga,there is nothing illegal with tax avoidance,the illegal thing is tax evasion
wynter masebo is right.avoidance at law is not illegal.please do not make it an issue.
Pamela give your hefty pay to ActionAid to give to orphans. Me and my friends, we wont donate to you.
Fine them heavily and warn them, next time kuya bebele!
If thats really true,Let them be fined heavily!!
Its time for nationalisation,investors are nothing more than infestors
While Zambia sugar may cry that they did nothing illegal thats not the issue,the issue is its was immoral to exploit us poor Zambians and take millions of dollars out of an already struggling economy.We buried some of our brothers and sisters today because monies from big companies like the mines ,Zambia sugar could have been put to bettering our road infrastructure,health care and education.Instead you siphon that money abroad.How dare you!How can any Zambian manager working at Zambia sugar defend this evil?
Isnt it that money for road development is going to Political patronage? How do you explain all these unnecessary By elections just to satisfy the never ending desire by PF to be a supreme party? Nothing wrong with what Zambia Sugar has done. They just searched through the Zambian law and found out that they could actually avoid tax by doing certain things provided fro under the Zambian law.
Imwe. What are those people in the photo doing?? I have a feeling they are stealing… That bus in the background must have a break down in Mazabuka and passengers started helping themselves… No wonder the company has opted to evade tax..lol…
Don’t read too much in the pic; those could be local people merely seeking a hide-out for love making. If some people can do it in a grave yard (which, by the way, is illegal in Zed); why not in the cane (so long they do not pluck the plantation)?
zambia sugar, Mopani, Kagem and how many other companies ?
MMD cro-oks have been removed but what is the change??
the worst lo.oter is Mopani ! at least $500 million misappropriated between 2003 and 2008 and the scam continues
banda’s regime was a electoral sc.am,
SAMPA AND CHIKWANDA, WHAT ARE YOU DOING ??? WHY DON’T YOU REVOKE MINING LICENCES?? ARE YOU LAZY.BONES OR ALSO ROTTEN TO THE CORE ???
–
Zambia Africa’s largest copper producer lost an estimated income of USD 175million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.
United Kingdom based Non Governmental Organisation, Action Aid said in its pilot audit by Grant Thornton, Zambia and Econ Poyry, a Nordic based global consulting and engineering…
continued
company which revealed glaring irregularities in production and revenue figures that Mopani Copper Mines submit to Zambia Revenue Authority for tax administration, mos twhich hinge on its links to Glencore AG international.”
“Zambia continues to lose on dividends from Mopani Copper Mines as the Glencore owned mine never declare any dividends to Zambia Consolidated Copper Mines Investment Holdings. During the period under review, Action Aid estimates that the Zambians government lost an estimated USD 50 million per year in undeclared dividends to ZCCM IH by Mopani Copper Mines, according to Action Aid was avoiding declaring any dividends by ZCCM IH through transfer pricing and over statement of the costs.
LOOTERS OUT !!
I agree with Wynter Masebo, with especially that big brains like that of Seyevor is in the top driving force of Zambia Sugar PLC. Good brains are leaving ZRA, how do you expect that org will advice the Govt. Poorly. ZRA legislative experts wake up.
Let them lower taxes to encourage higher compliance.
The pilot audit concluded that “the Mopani cost structure cannot be trusted to represent the true nature of the costs of the Mopani mining operation.”
The audit revealed that Mopani’s parent company, Glencore AG, the purchaser of its copper, determines prices and that some copper from Mopani was sold under an “old” contract with copper in one instance being sold at 25 per cent of official prices at LME.
This is what happens when you elect ill educated PF nothings.They keep chasing opposition instead of chasing tax evaders.But then again,they are ill educated and tax laws/ tax collection procedures are too complex for their little educated minds.Remove these illiterates and your tax collection will improve.
illiterate? indeed mr ‘tumbuka pride’.48 years after independence and you sound confortable saying that.the question ,sir is much biggger and more complex than the kindergaten stuff yu ‘re trying to dish out. today we have millions educated bt still continue being cheated.how much were we cheated 10 years after independenc?i guess we lost it right from the day we wer colonisd.it beats me.
It is a shame that this is happening in this time and age in zed. Where as avoidance could be done within the confines of the law, one must take congisance of the thin line between avoidance and evasion. Further, tight legislation would amount to naught without proper enforcement. Which begs the question, is there political will in the PF government to curb this scourge? I think that it’s gonna be a long while, if ever, for ZRA to be equipped to deal with simple transfer pricing let alone complex tax structures involving round tripping.
Thank you ActionAid. Keep speaking for economic justice.
Sorry iam with mushota on this , it is about time us as zambians to put our selves together and start to develop the attitude of own a company like zambia sugar,cos it is clear foriegn investers dont respect zambia laws and people.What you must know is that it is not only glencore(mopani) and british sugar(zambia sugar) alone in these tax dodging scams,there are alot more.Its almost 50 years since we got independence ,but no single zambian owns a mine.Look at our neighbours KATUMBI (DRC) and MOTSEPE (SA) .
If the pope can resign on moral grounds, why cant these whites just admitt
The cobra lost his poisonous teeth . He can no longer bite
But he can still spit and make you blind! Thats why you always loose, you only prepare for one expected attack, you forget he can conquer by using other other weapons.
Not too long ago a panelist on the committee probing Starbucks in the UK told the CEO: “We are not saying what you are doing is wrong. We are saying it is immoral.” I would love to hear that woman say the same thing about her own multinational doing immoral things in other countries. So then tax avoidance is good outside the UK, is it? Because it is legal and not evasion, huh? Interesting set of ethical standards…
Politics in the world are based on ‘self interest’ and ‘double standards’ (this is based on my humble observation and experience). You got to stand up and fight for your own course, or else you will be run over. Sadly, that is the reality. Like anything else, Zambia has to fight its own ‘tax’ wars. It is a crooked world!
these NGOs can your report give us fact the correct scenario and the fraudulent secenario so that we are able to prove these facts moreover,did you assess the competences of the people who prepared that report.why did ZRA not discover this earlier.Barclays should be penalised for offer such a product actually it is a big crime against the BFSA the bank is involved in illegal activities tax avoidance -money laudering
expose some more companies
Expose Tax EVASION. You are wasting my time on tax avoidance; it is legal and morally right. What is immoral about you not donating all your pay to Kasisi orphanage?
Anyone who says TAX AVOIDANCE is not TAX EVASION is either a CROOK or an IGNORANT person.
Dont expose your ignorance baba.Go and resesrch before you post your comment
This is nothing new, Tax avoidance has been there since taxes were created it is legal. You have to be in business to understand this…. what Zambia Sugar is doing is what your Starbucks (biggest coffee chain in the world), Facebook and Amazon have been doing in the UK; imagine that a company like Starbucks has never recorded a profit since 2009 in the UK; why? Because it moves its losses to high tax areas and profits to low tax areas like Ireland…morally this is wrong. The UK gov’t can’t do anything but seal the loop hole in the next budget BUT the general public have voted with their feet & bombarded its websites with complaints hence Starbucks has decided to pay the backdated tax voluntarily. Would the Zambians take the selfsame stance and boycott ZSC? Time to wake up…
Who is Barclays Bank really f**ling by shutting down of its tax avoidance unit; are you telling us that the Bank will also close all its business accounts and Investment bank Depts? If I went to my bank business manager for such advice he has no obligation but to provide it as its legal.
The likes of Zambia Sugar have the best Zambian brains in the business advising them on such matters hence ZRA need to pull up their socks and attract the best and the useless greedy politicians should keep away as they are part and parcel of all this incentives all created to attract FDI. One has to look at the ZRA website and see the incentives on offer to foreign investors no wonder we are considered as the best place by foreigners to do business.
Wake up!!
Give investors a break; we need them.
According to my litle knowledge tax avoidance is not illegal.What isillegal is tax evasion.If you expect that people or coooperations like paying tax them you are not trying to be real.The only prudent call here should loooking for ways to make laws that turn avoidance to evasion.SIMPLE
This is a classic Tax avoidance mechanism that has been employed. The use of shell entities and back charging management fees is as old as paying ghost employees. From a Tax basis where was ZRA in all of this?
Also why was there no regulatory oversight on the part of BOZ when a company such as Zambia Sugar clears off a substantial debt in a very short time. Checks and Balances. BOZ should have realized if the ability to clear debt is there are the P&L even legitimate. Then comes the norm of Inter Company borrowing, was the government sleeping and not read about what Lehman brothers in the US were doing. The basis of keeping two books and off balance sheet accounting is very high in ZED. ZRA wake up and do your jobs and not drive flashy cars. Honarable Min Finance where are you in this.
Before ActionAid chases away investors at Nakambala, can ZRA reveal if Zambia Sugar is not paying taxes that are due to the Zambian government? ActionAid just want to raise money to fund their luxurious life styles. Look at rich Pamela ati NGO, NGO when you are a hard core capitalist.
Barclays bank is another that exploit clients thru various bank charges I actually advocate for clients to close their accounts. I closed mine with them last year and it was a big relief to quit company with them.
Barclays Bank is really an exploitatve Bank. Better to close an account With them.
What evidence do you have?
Sugar company plc has NO good business principles judging from what has been unearthen. In short sugar company has bankrupt business principles.
Thriving on undeserving profits. What a shame. The revelations have shown that whites multinational companies are # one crooks. Shame on them.
Now that they have been exposed they should repair the damage and their poor business image.
It creates jobs and foreign exchange
Only those who understand accounting know that the last thing companies pay is tax and the first thing an employee pays is tax. As a shareholder, am interested in the company increasing the asset column and reducing the liabilities column (taxes) and i congratulate Zambia Sugar for doing so legally. If God does not demand more than 10% who is the Government to demand 35% in contributions?