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FQM refutes ZRA’s tax scam report, but revenue body insists it’ll go for all mines

FIRST Quantum Minerals Limited has refuted allegations that the mining company has been importing spare parts without paying customs duty.

But the Zambia Revenue Authority (ZRA) has insisted that its audit covers all mines and does not only affect FQM.

ZRA on Thursday said it had uncovered a mining tax scam worth K76.5 billion.

Zambia Revenue Authority (ZRA) Corporate Communications manager Topsy Sikalinda stated in a statement that that the authority was taking the case seriously and that officers shall pursue all available to recover all taxes on behalf of the Zambian people.

“The Zambia Revenue (ZRA) has started the process of comprehensively auditing mining companies in all applicable tax types. Last year, the amnesty on interest and penalties was announced to allow tax payers to clean up their tax accounts. Those with issues were expected to engage ZRA and have a waiver on interest and penalties. A post amnesty review shows that only small and medium companies stepped forward and the authority raised about 4.4 billion kwacha from the programme. Unfortunately, most large companies did not participate despite numerous reminders and extensions,” Sikalinda stated.

“For this reason, we are announcing the preliminary assessment of K 76.5 billion (USD 7.7 billion) issued to a prominent mining company for misclassifying consumables and spare parts at importation for the last five years. The said items were declared as mining machinery (which attract customs duty at zero percent) when in fact not. The applicable duty rate for the items ranges from 15 to 25 per cent.”

But First Quantum Minerals Limited president Clive Newall stated in a statement that the company was going to work with ZRA to resolve the issue.

“The company confirms that it is in possession of a letter from the ZRA, dated March 19, 2018, noting an assessment for import duties, penalties and interest on consumables and spare parts of 76.5 billion Zambian kwacha,” stated Newall in a brief statement.

“The company unequivocally refutes this assessment which does not appear to have any discernable basis of calculation and will continue working with the ZRA, as it normally does, to resolve the issue.”

When contacted for a comment on FQM’s statement, Sikalinda referred to his earlier statement where he stated that ZRA investigation teams and auditors would commence the audit of all mining firms in Zambia.

“One thing that is clear is that it is not only them. We are going after all the mines. If you remember in the statement, we even said that we are going after all the mines. That is the key issue. Monday, we are moving in and all those with issues should come out before we follow them,” said Sikalinda.

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