The Centre for Trade Policy and Development has called on the Zambia Revenue Authority to give an update on the tax evasion scam involving First Quantum Minerals (FQM).
Early this year, on the 20th March 2018, the Zambia Revenue Authority disclosed 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 $7.5 Billion.
CTPD Executive Director Isaac Mwaipopo said after number of speculations from various sections of society, his organisation observed a response from FQM refuting the tax assessment issued by ZRA.
“The Zambia Revenue Authority 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 percent 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.”
Mr Mwaipopo said FQM further indicated that the assessment did not have any discernable basis of calculation and was to continue working with the ZRA in resolving the case.
“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 Zambia Revenue Authority has not made a single announcement on the issue, people need to know how far the investigations have gone,” Mr Mwaipopo said.
“It is often the outcome that such cases pass in silence and the matter easily gets wiped from public conversation, but $ 7.6 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.”
Mr Mwaipopo urged the 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,” he said.