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By NKOLE CHITALA
COMMERCE, Trade and Industry deputy Minister Miles Sampa yesterday described tax avoidance as sad and said he is passionate about corporations paying tax.
Mr Sampa expressed optimism that more money will be captured by the government once Statutory Instrument (SI) 32 is implemented on July 1.
“The issue of tax avoidance is a sad one… I have been very passionate about it,” Mr Sampa said. “I have seen what is going on [how paying tax is legally avoided]…part of the reason why members of the business community are meeting here today is because they feel that they are highly taxed,” he said.
Mr Sampa, however, stated for the record that “not all mines are evading or avoiding tax” in Zambia as some were fully compliant.
He was speaking as the chief guest at a breakfast meeting organised by the Lusaka Chamber of Commerce and Industry (LCCI), where he cautioned that a ‘huge cartel of tax-evaders’ does exist in Zambia’s mining sector which is robbing Zambia of billions of kwacha annually.
Mr Sampa also cautioned mining companies threatening to shut their doors once SI32 is implemented to go ahead because government shall not be cowed into reversing its decision.
“I know the first thing they [some mines] will do once the SI is in place is to threaten to close down the mines,” Mr Sampa said. “But as Zambians, we should be bold enough to say that if they want to do that, let them close and go.
“What is the point of them getting our copper and leaving nothing for us?” Mr Sampa asked.
Mr Sampa also disclosed that the same mining companies that have been resisting paying more taxes have been benefitting fully from subsidised fuel stocks which the government imported expensively and sold to the market cheaply.
He said the knowledge he possesses as a merchant banker of many years added to his frustration when matters appeared to be ‘sluggish’ in moving the SI32 forward.
“I could see and I know exactly how tax avoidance is done, so I was desperate to get that rectified at the Finance Ministry,” he said.
Mr Sampa lamented the fact that some mining companies kept giving Zambia the “short end of the stick” despite the good will the government extended in subsidised fuel and other tax incentives and that the honeymoon ends July 1.
“Their [multinationals mostly mines] books locally continued to show high costs and losses while their parent companies abroad continued to record profits and they continued to pay for bogus management fees abroad, which is wrong,” Mr Sampa complained.
His parting shot was, “If firms threaten to go, we will let them go and other firms will be knocking at the ministry (of Commerce, Trade and Industry) the very next day…We should not be blackmailed as Zambians.”
Mr Sampa on behalf of the government thanked the tax-compliant mines, which he described as good corporate citizens.
His sentiments come on the back of President Sata raising red flags over the West’s history of exploiting Africa’s mineral wealth when he met former South African President Thabo Mbeki on Tuesday.
The statements also come just days after the influential G8 met in Northern Ireland to discuss how to plug tax avoidance holes that help multinationals stash their money in ‘tax havens’.
