FIRST Quantum Minerals (FQM) paid over US$530 million in taxes to the government in 2018, with an additional $10 million spent on community and infrastructure projects, a 2018 Tax Transparency and Contributions to Government Report has revealed. According to Langmead and Baker Communications, the report reveals that FQM paid $144 million in income tax to the Zambian Revenue Authority, $197 million in mineral royalties, $73 million in PAYE, $8 million in withholding tax and $90 million in consumption and import taxes last year.
“First Quantum Minerals (FQM) paid more than US$533 million (K5.6 billion) in taxes to the Zambian government in 2018, with an additional US$10 million spent on community and infrastructure projects. Contributions to the nation’s coffers accounted for two thirds of the global company’s worldwide tax payments, according to its just-published 2018 Tax Transparency and Contributions to Government Report, a legal requirement under Canada’s Extractive Sector Transparency Measures Act (ESTMA) and Chapter 10 of the EU Accounting Directive,” the report states in part.
FQM added that the 2018 Tax Transparency and Contributions to Government Report highlights First Quantum’s contributions to Zambia which helps to illustrate the positive impact the mines strives to create.
“The company’s Kansanshi Mine in Solwezi accounted for US$315 million of the payments, 58 per cent of the total payments to Zambia, while its Trident project, including Sentinel Mine at Kalumbila, accounted for 28 per cent or US$150 million, a figure that reflected that the mine only began commercial operation in 2016 and has yet to turn a profit,” the report revealed.
The report adds that FQM’s tax payments in Zambia during the year represented 14 per cent of the country’s budgeted tax revenue of K41 billion (US$3.9 billion) for 2018. FQM’s chief financial officer Hannes Meyer indicated that the report’s calculations are based on the average exchange rate for the year of K10.4781 per US dollar.
“At First Quantum, we know that our success is dependent on the wellbeing of the economies and communities where our businesses operate. We also believe that transparency can help stakeholders to understand the economic benefits generated by our activities, and how those benefits are distributed for local, regional and national economic and social development. Therefore, we strive to ensure that our disclosures are transparent, consistent, accessible and presented in a way that is easily understood,” Meyer said.
“In taking this transparent and responsible approach, we provide communities with the opportunity to understand the revenue contributions we make to their governments and how these contributions ultimately assist in the development of local communities and the overall economic and broader positive wellbeing of those communities and countries.”
He also explained that First Quantum’s investments are large and involve significant amounts of upfront capital.
“First Quantum believes that, to attract capital to make these large scale multi-year investments, it is essential for tax policy to be stable and consistent and that agreements are respected…we believe by openly working with host countries on tax policy and ensuring we are transparent in what we invest, pay, and contribute, we can benefit the countries we operate in by not only the contributions we make but also by the positive endorsement our investments make in the host country,” said Meyer.