ActionAid Zambia says Glencore’s decision to halt its zinc operations and cut 169 jobs at its Sable Zinc Mine in Kabwe is a shameless attempt to strong-arm the government into relaxing its VAT rules.
ActionAid Zambia Director Pamela Chisanga says the Zambian government has every right to demand companies prove they are not avoiding taxes by selling the country’s assets at reduced prices.
Ms Chisanga says Zambia is one of the world’s poorest countries and desperately needs tax revenues to build public services and grow its economy.
She says while exporters like Glencore claim to have legitimate objections to Zambia’s VAT rules, they must not try to force the government’s decision through these heavy-handed tactics.
Ms Chisanga has urged the government to stand firm and ensure that some of the world’s biggest mining companies, pay their fair share of tax.
Glencore-owned Mopani Copper Mines has suspended its zinc operations in Kabwe and cut 169 jobs amid a $600 million row over VAT refunds to the country’s mining companies.
Mining companies and other exporters have opposed current rules that require them to provide documentation of the receipt of exports in order to receive VAT refunds from the government. This documentation can be used to identify whether exports are under-priced, a common tool for avoiding taxes.
Mining companies in Zambia have said it is impractical for them to implement the rules, and note that whilst they have been in force since 1997 the government has only sought to enforce them since 2013.
Campaigners in Zambia have countered that the mining companies have provided no explanation as to why it was difficult for them to disclose the documentation required.
( Monday 06th October 2014 )