Sunday, December 15, 2013

KCM playing with fire over PAYE, warns Shamenda
By Abel Mboozi
Mon 28 Oct. 2013, 14:01 CAT

COMMENT - KCM is 87% owned by Swiss based champion tax evader Glencore International AG. - MrK

LABOUR minister Fackson Shamenda says the government has officially written Konkola Copper Mines (KCM), directing the mining company to offset the difference in Pay As You Earn (PAYE) due to the Zambia Revenue Authority.

Shamenda said in an interview yesterday that on Friday, he met KCM management and the union at his office, where the mining company was reprimanded for its 'incompetence' over the non-remittance of PAYE for its workers to ZRA over years.

"KCM is playing with fire; the company cannot blame workers for a mistake which has taken five years. Its incompetence should not be blamed on workers. I have officially written to management at the company, reaffirming my directive, which has to be followed to the latter," Shamenda said.

He said failure on the part of KCM to follow the government directive would spell severe consequences on the mining company.

A tax audit conducted at KCM recently had established that the mining company underpaid PAYE tax for its workers for the financial years 2006, 2007, 2010 and 2011 due to a 'payroll system error'.

Following the audit, KCM decided to effect deductions from its employees effective October to offset the defaulted amount for PAYE owed to ZRA.

To that effect, Shamenda last week directed that KCM should not effect any deductions from employees in form of tax arrears because it was not their fault.

Shamenda said it was not the employees' responsibility to ensure that correct tax is deducted.

In June this year, KCM had asked the government for time to pay back an overdue K136.8 million or US$25.8 million debt it owes the ZRA.

The company asked the government to give it time to pay, citing high costs of production in the industry even as copper prices remained buoyant but Shamenda said the mines had an obligation to pay tax to the ZRA as prescribed by the law.

The Mine Workers Union of Zambia had even sought the intervention of the court through an injunction to stop KCM from effecting the deductions but later withdrew the matter following Shamenda's directive that the deductions should not be effected.

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