No evidence that mines are evading tax:Chamber Chief says onus is on critics to prove their allegations
Those who accuse the mining industry of tax evasion and illicit financial flows should present the proof behind their allegations, Chamber of Mines president Nathan Chishimba said today.
“In the absence of evidence, these allegations are both outrageous and unhelpful,” he said. “They are intended to damage the reputation of an industry that is central to our economy.”
Chishimba was reacting to an article in the Lusaka Times (October 1, 2017) by Kalima Nkonde. Nkonde argues that last month’s national budget presentation was flawed because it “does not address tax evasion and illicit financial flows by Mines”. He accuses the mining industry and multinationals of “robbery” and “smiling all the way to the bank”.
Chishimba said: “The article is riddled with speculation presented as fact, and it uncritically recycles claims by third-parties about missing tax revenue that have never been substantiated or verified. Once again, we have a commentator quoting from the Financial Intelligence Centre report, without actually having read it – if he had, his conclusions would be very different.
“We have tried to follow the trail of these allegations to their source, but we cannot find any primary data source that reveals this figure of $3billion – or any other figure for that matter. Furthermore, these are the very same allegations that preceded the regressive mining tax policy changes of 2014-15, and we surely remember how much damage that hiatus caused us.”
Chishimba said the sums being bandied about – running into billions of dollars a year – are so large as to stretch the bounds of credibility. They imply that more than half of Zambia’s annual copper production is somehow unaccounted for.
“We challenge Mr. Nkonde – or anyone else – to produce the evidence of these allegations,” said Chishimba.
He added that the Chamber of Mines was not the only organisation in Zambia to question these constantly recurring allegations, that the mining industry was stealing $3 billion in mineral production every year that doesn’t show up in official statistics.
In an interview with the online mining publication Mining for Zambia earlier this year, the allegations were roundly dismissed both by Mooya Lumamba, Director of Mines at the Ministry of Mines and Mineral Resources, and Ron Smit, chief consultant on the Mineral Production Monitoring Support Project, a four-year programme funded by the European Union.
“These allegations are wholly untrue, and come from a position of ignorance – not just about how copper is mined and produced, but how our mineral monitoring systems work,” said Lumamba in the interview. “It’s alarmism.”
Smit agreed. “We have noticed that this particular allegation has been recycled in the media for several years now, but no one ever offers any proof.”