Thursday, March 28, 2024

KCM must bear costs of 5 years unpaid PAYE-Government

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Mr Shamenda
Mr Shamenda

GOVERNMENT says the unremitted Pay as You Earn (PAYE) tax to the Zambia Revenue Authority (ZRA) by Konkola Copper Mines (KCM) should be paid by the mining company and should not be deducted from workers’ salaries.

Minister of Labour and Social Security Fackson Shamenda said at a media briefing in Lusaka yesterday that it is not the employees’ responsibility to ensure that correct tax is deducted from their salaries but it is KCM’s duty.

“A tax audit report has confirmed that KCM has underpaid ZRA PAYE from its workers for a number of years and intends to correct this anomaly by effecting deductions from its employees,” Mr Shamenda said.

The minister said KCM management should bear the responsibility and no employee should be adversely affected by management’s incompetence.

He said it is the responsibility and obligation of any company or investor to remit the correct tax to ZRA and urged KCM to do just that.

“My ministry directs that KCM management bears the liability to ZRA to offset the difference in taxes due,” he said.

Mr Shamenda said Government has the duty to ensure that workers are respected and provide a conducive environment for conducting business.

He said the stance taken by KCM to make deductions from employees’ salaries to raise funds to pay ZRA the outstanding PAYE, can create problems that can possibly result in industrial unrest.

Mr Shamenda urged investors to abide by the law and meet their legal obligations.

“Incorrect remittance of tax is a serious offence and this refund should be made to ZRA and management of KCM should bear the costs. Making deductions from employees can bring about industrial unrest,” he said.

Mr Shamenda has since asked KCM management and representatives of the Mine Workers Union of Zambia to discuss and resolve the matter.

On Monday, the Daily Mail revealed that a tax audit established that Konkola Copper Mines (KCM) underpaid Pay As You Earn (PAYE) tax for its workers to the Zambia Revenue Authority (ZRA) due to a payroll system error.

This covers the financial years 2006, 2007, 2010 and 2011.

According to an internal memorandum dated October 17, 2013 obtained by the Daily Mail, KCM vice-president for human capital management David Kaunda said the Vedanta Resources Plc-owned mining company will effect deductions from affected employees who were in employment during the period under review.

“Therefore, effective October 2013, KCM will effect deductions from affected employees who were in employment during the period under review,” Mr Kaunda said.

Earlier this year, KCM asked Government for time to pay back an overdue K136.8 million (US$25.8 million) debt it owes ZRA.

The US$25 million debt was first discovered after a standard routine ZRA probe which commenced in April.

13 COMMENTS

    • Penalties and back taxes are the way to go. Thank you ba Shamenda cos our people can’t afford extra taxes especially that PAYE is increased each year. The increase is because of automatic INFLATIONARY Tax. Please, please,…..introduce indexation!! Almost all Zambians, bar some tax specialists are not aware of this stealth tax and even now are celebrating the so called increase in tax bands for the non-tax threshold. They are massively deceived. VAT has continued at 16% on inflation increased consumption. Tax is tooooooo hiiiighhhhhhh. Donchi Kubeba…..loooooweeeeer my tax. I voted for you!!!!!

  1. There is abundant dishonestness in the manner the KCM management is running the system in Mines. From my own perspective, the correct PAYE monies were deducted from employees but less was remited to ZRA. These are the same characters who have destroyed everything that used to run smoothly and professionally under ZCCM Ltd. Today under KCM, there is no genuine working system in place. Some processes which used to take less than a week for instance processing a ”reclassification change note” takes ages even years to reach the last signatory. They have sent almost all staff on redundancy or VSS and work which was done by more than 15 people is done by one person but with no regard to salary increase.in short Miners at KCM espcially those below management level are used more less like…

  2. Watch this company closely. This is company will go the BINANI way. KCM is not heading anywhere with the current caliber of investors/management. This means Kitwe, Chingola and Chililabombwe towns will be hardly hit economically.

    Let the government own up and repossess the mine. All the Zambian workers have been frustrated. if you want facts about this company ask Zambian workers in KCM and those graded in KCM 5. They have a few Zambian bootlickers who are like them, don’t go to them

  3. The Accountant must be scrutinised and ZICA should take it leading role.It part of the accountant role to ensure that the correct taxes are remitted.

  4. My humble appeal to zambians is that lets take over the mines because in my own understanding the indians brains are no better than ours.We have well qualified people in nearly every field if not all-engineers,doctors,pharmacists,architectures etc.

    • I agree, but who will put their millions of dollars at risk? We need Zambian investors with deep pockets and big balls to step up and risk. We have great workers, but need big-time investors of our own. That way the money stays in the country.

  5. The revelations at KCM are just a tip of an iceberg regarding tax evasion and fraudulent accounting in many companies in Zambia. ZRA should therefore become more vigilant and proactive in executing their responsibilities in order to flash out free riders. Zambian employees are so heavily taxed and it is not even negotiable. Let KCM pay the millions and no employee must suffer because of their incompetence! full stop!

  6. KCM has gone ahead with PAYE deductions against govt advise. Ask anyone from KCM, deductions have been effected this monthend.

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