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Government saving face on mine tax issue - Simuusa

Government saving face on mine tax issue - Simuusa
By Mutale Kapekele
Wed 15 June 2011, 06:30 CAT

PEOPLE who were calling for more tax from the mines have been vindicated, says a parliamentarian. Nchanga member of parliament Wilbur Simuusa said the government is embarrassed by the foreigners’ action taken against Mopani’s tax underpayments and is now trying to save face by asking the mine to pay more tax.

On June 1, the European Investment Bank (EIB) froze its US50 million funding to Glencore, the parent company for Mopani Mines following two independent audit reports that revealed inconsistencies in the figures that the mine submitted to the Zambian Revenue Authority for tax administration.

The first report was carried out by accountants Grant Thornton on the insistence of the government to investigate the tax affairs of the country’s second-biggest miner last year.

The second report was carried out by European experts who reported to the British parliament that Mopani paid less tax than it should and polluted the environment.

Last week, finance minister Dr Situmbeko Musokotwne said although the Zambia Revenue Authority (ZRA) has asked Mopani to pay more money in underpaid taxes, Mopani must be given a chance to respond.

Dr Musokotwane did not say how much was owed, but disclosed that Mopani has been asked to pay more in tax and what it owed voluntarily or faced a bigger tax bill from ZRA.

But Simuusa in an interview said the government was being hypocritical in dealing with the matter.

“The people who were calling for more tax from the mines are vindicated. The government is hypocritical and is now trying to save itself from shame. Musokotwane was adamant when he was defending the mines and tried hard to put critics down,” Simuusa said.

“If the mines were paying enough tax, why are they chasing Mopani now? The government is embarrassed and now wants to save itself. Musokotwane even hid the audit report because he knew all along that the mines were not paying enough.”

Simuusa said despite the statement from Musokotwane that Mopani should pay more, the government had no political will to collect the correct mining tax.

He said the government would always be on the side of the mines since they were close to them.

Simuusa also said the government had no capacity to effectively collect tax from the mines, adding that it was not surprising that the EIB had frozen funding to Mopani.

Yesterday, economic consultant Bob Sichinga said the law currently does not allow ZRA to collect more money from the mines.

Sichinga said currently, it was legally not possible to collect enough taxes from the mines, adding that ZRA does not collect money anyhow but needed a law to allow them do so.

Labels: EIB, MINING, TAX EVASION, WINDFALL TAX, WYLBUR SIMUUSA

posted by MrK @ 4:37 AM