Tuesday, July 29, 2014

(STICKY) Chikwanda wants govt to pay mines $600m in VAT refunds
Edited by Chiwoyu Sinyangwe

COMMENT - So the state borrows $1 billion through a Eurobond, and they don't know what to do with it? And they have the gall to say we need another Eurobond, because 'we need something for agriculture'? If they ran out of ideas, I have few ideas that not only spend the money well, but would create massive returns to the state - a concept that seems to elude the present government. And no, I don't trust the UPND, let alone the MMD who had 20 years to develop the economy. Giving borrowed money to the mines! Outrageous. - MrK

FINANCE minister Alexander Chikwanda wants the government to pay mining companies the disputed US$600 million (about K3.6 billion) in value-added tax repayments over a staggered period.

ZRA has withheld over US$600 million in value-added tax repayments to mining companies that have failed to provide importer documentation required to qualify them for VAT reclaim on the zero-rated copper exports.

The minister [Chikwanda] says our current fiscal space is severely constrained for us to refund these mining companies of their VAT but that we can only clear the huge backlog by negotiating staggered repayments with the mining companies after we have instituted a more prompt VAT refunds regime,” according to the sources within Ministry of Finance.

The sources said the government currently did not have sufficient funds to offset the VAT refunds being claimed by mining companies.

“The minister says the only way for the government to clear this backlog promptly is to allow Treasury access some funds from the recently-acquired US$1 billion which currently was ‘sitting’ at the Bank of Zambia. Of that US$1billion Eurobond, only US$300 million has been disbursed so far and remaining the US$700 million is still with the Central Bank.

The sources also said that Chikwanda contended that VAT General Administration Rule Number 18, which required ZRA to obtain information from importers outside Zambia’s jurisdiction had proved impractical and was blamed for delayed processing of VAT refunds for the mines.
VAT Rule 18 was aimed at assisting the government collect more accurate trade statistics.

In line with VAT general administration Rule Number 18, for any exporter to qualify for VAT zero rating of its exported goods, they must satisfy requirement which included copies of export documents for the goods bearing a certificate of shipment provided by ZRA, copies of import documents for the goods bearing a certificate of importation into the country of destination provided by the customs authority of that country.

Rule Number 18 also required exporters to provide proof of payments by the customer for the goods, tax invoices for the goods exported, documentary evidence, proving that payment for the goods has been made by the customer into the exporter’s bank account in Zambia [as introduced in January 2013], and such other documentary evidence that might reasonably be required by the authority.

But according to sources, Chikwanda had proposed that ZRA should amend Rule Number 18 to limit it to regulation and verification of exports and bank certification of receipt export proceed in order to clear the uncertainty and restore the confidence in the economy that was undermined by adjustment to Rule 18.

Last year, the government streamlined administration of the VAT refunds for the mining sector which included introducing rules requiring provision of documents from importers of copper to authenticate the final destination of copper being exported out of Zambia and the export revenue needed to be paid directly to a Zambian bank although some mining companies were paid through foreign accounts.

Konkola Copper Mines (KCM) has taken ZRA to the Lusaka High Court over a K3.2 billion tax bill relating to a retrospective 16 per cent VAT charge on exports from January 2011 to March 2013.

Some companies, including those in the mining sector, found to be complying with Rule Number 18 include KCM, Mopani Copper Mines and Zambezi Portland.

“The problem is that some mining companies and even other exporting companies allude that ‘they sell their products mostly to international traders who take ownership of the product either at the mine/factory gate or as soon as they are put in a ship at Dar es Salaam, Dubai or Durban,” the sources within ZRA said. “For purposes of VAT, a sale at the mine/factory gate is a local sale and should therefore be standard rated sale at 16 per cent of the sale and not zero-rated.”

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At 9:11 PM , Blogger MrK said...

Chikwanda will cripple economy - Milupi
Edited by Chiwoyu Sinyangwe and Abel Mboozi |
Updated: 07 Aug,2014 ,10:04:38

ADD president Charles Milupi says finance minister Alexander Chikwanda will cripple Zambia’s economy if is he is allowed to pay mining companies US$600 million (about K3.6 billion) in VAT refunds.

Chikwanda wants the government to pay mining companies the disputed US$600 million in Value-Added Tax refunds over a staggered period.
Milupi said Chikwanda would cripple the economy if his activities with the mining companies were not checked.

He said in the Zambian context, mines did not even pay taxes, save for their contribution to employees through Pay As You Earn.

“And the VAT being talked about, which is US$600 million, this figure will cripple Zambia,” Milupi said.

“The [US$600million] to come from the coffers of the country where the mines have not contributed so much is a very large chunk and at the moment, one wonders where that kind of money will come from. Will it come from the Eurobond? In other words, is Zambia borrowing to come and pay the mining companies? No, that should not be the case. Chikwanda is therefore off-target to insist that the country pay such a huge sum of money.”

Milupi said there were serious schemes to defraud the country of its revenues from the mining sector.

“Why are they so keen to make sure that all the mining companies get all the money out? That is why I am wondering why they are zero-rating copper exports? They are involved in schemes to minimise the taxes they pay to the Zambian Treasury,” he said.

“The mining companies are due to be paid US$600 million and right now we are surviving on Eurobonds, so where are you going to get US$600 million? That is a lot of money. This is a substantial amount of money; where is this government going to get it? Are they going to borrow money to pay the mines? Why are they so reluctant to ensure you get around these tax avoidance schemes? We have told them ‘Get windfall tax’; they are not doing any of that sort.”

He said the government should begin to listen to people’s views, especially those that had great experience with the mining industry.

“The government should listen to people like Dr Mpande and the way he has put this issue into context. Dr Mpande is a mineral economist, he has worked in the ministry of mines. He has been a minister before and so he knows what he is talking about,” Milupi said.

“Dr Mpande is also a patriot, I know him very well because before he became a chief, he was ADD vice-president. So he is a man I have tremendous respect for in terms of his knowledge of mineral economics and the mineral industry in Zambia.”

On Monday, mineral economist Dr Mathias Mpande said Chikwanda was a very bizarre Minister of Finance who had been allowed to promote the interests of mining companies at the expense of Zambia and its poor citizens.

ZRA has withheld over US$600 million in value-added tax repayments from mining companies that have failed to provide importer documentation that qualified them for VAT reclaim on the zero-rated copper exports.

 
At 9:11 PM , Blogger MrK said...


“The minister [Chikwanda] says our current fiscal is too severely constrained for us to refund these mining companies of their VAT but that we can only clear the huge backlog by negotiating staggered repayments with the mining companies after we have instituted a more prompt VAT refunds regime,” according to sources within Ministry of Finance.

The sources said the government currently did not have sufficient funds to offset the VAT refunds being claimed by mining companies.

“The minister says the only way for the government to clear this backlog promptly is to allow Treasury access some funds from the recently acquired US$1 billion which currently was ‘sitting’ at the Bank of Zambia. Of that US$1billion Eurobond, only US$300 million has been disbursed so far and the remaining US$700 million is still with the Bank of Zambia,” according to sources.

And Milupi said the government had put Zambia even in a worse position than it was during the days of the defunct Zambia Consolidated Copper Mines.

“At the beginning of the PF government, honourable Wylbur Simuusa, who was the first minister of mines in the government was very keen to introduce the windfall tax and in no time at all, he was removed from the ministry. Two weeks ago, honourable Bob Sichinga said Zambians were not gaining from the mining companies, this [Vedanta chairman Anil] Argawal, who was boasting of taking so much money as so on,” Milupi said.

“So we have members of Cabinet who are fully aware of what is going on and they want windfall tax in, but maybe we have others who don’t want it. But it is for them to tell us why they want Zambia to continue to be robbed in the manner that it is being robbed because they are educated and experienced people. If they, when they were in opposition, were saying the same thing, how come all of a sudden it is no longer important? I don’t want to accuse anybody of anything but they should explain to the Zambian people and so far, they have not given any tangible reasons why they are not taxing the mines the way they should be taxing them.”

Milupi said people projecting the interests of mining companies at the expense of the country were on the payroll of mining companies with full knowledge of President Michael Sata.

“These companies are so clever and the PF government has decided to be in their pockets. We have a situation where they [mining companies] are contributing negatively and now, they are even claiming to be refunded vast amounts of money,” said Milupi. “What this government is doing is to leave our future with vast debts from the Eurobonds with big holes mining companies are leaving in the ground and it’s unfortunate.”

 
At 3:26 PM , Blogger MrK said...

Chikwanda is double-dealing
Edited by Joseph Mwenda | Updated: 18 Aug,2014 ,13:08:43

FR Richard Luonde has accused finance minister Alexander Chikwanda of double-dealing the Zambian government with the mines and of eating with both hands.

And Fr Luonde has challenged Chikwanda to deny that he has interests in supplying to the mines in Zambia. He said Chikwanda is protecting the interests of the mines in Zambia because he is a supplier to the industry.

“Chikwanda is double dealing us with the mines and is eating with two hands. We expected him to say ‘since I have business interests in the mines, let me stay away from politics’ or better still, relinquish his business connections with the mines. But he has continued to eat with both hands. He is enjoying a ministerial salary with so many benefits and allowances and also wants to eat from the mining sector through supplying,” Fr Luonde charged.

He said Chikwanda should not be allowed to superintend over the financial affairs of the country when he had vested interests in the mining sector.

Fr Luonde said Chikwanda’s decision to help the mining companies in reclaiming Value Added Tax (VAT) refunds from the government was clearly meant to impress his business partners in the sector to which he was supplying.

“It is, therefore, not shocking that Chikwanda whom the Zambian people have entrusted with the responsibility of collecting revenue from the mines is helping the same companies to milk the government by proposing a US$600 million payment to the industry in tax refunds. This is because he doesn’t have the interests of the Zambian people at heart,” Fr Luonde charged.

He wondered what kind of National Budget proposal citizens should expect from Chikwanda if he was directly influencing the mining policy while also benefiting from the country’s major economic sector.

And Fr Luonde urged Chikwanda to stop threatening to sue people who point out irregularities in the way he was managing national resources.

“He should stop threatening to sue people who are saying that his position regarding the mining sector is untenable. Where is his ethical morality in this matter? Let him be brave and tell the Zambian tax payers why they should not demand his resignation as finance minister,” he said.

Fr Luonde said Chikwanda’s conflict of interest borders on criminality.

“His involvement with the mines is tantamount to fraud, I am therefore asking Mr Chikwanda to deny if any of what I am saying is not true,” challenged Fr Luonde.

 
At 11:31 PM , Blogger MrK said...

Chikwanda evading my challenge about him being a supplier to mines - Fr Luonde
Edited by Abel Mboozi | Updated: 21 Aug,2014 ,13:59:03

COMMENT - So the Minister worked for the mining company Africa Rainbow Minerals until 2014. And he thinks that doesn't give him a conflict of interest? And he dares talk about 'creating an enabling environment' for the mines - enabling crooks like Anil Agarwal to steal $500 million a year from the economy. How very accomodating. It is excellent that the ACC is having a look at his finances. By the way, the CEO of Africa Rainbow Minerals is Patrick Motsepe, listed by Forbes as Africa's 10th wealthiest man. - MrK

Ministers Chenda and Chikwanda inspect Lusaka road projects yesterday - Picture by David Kashiki

ALEXANDER Chikwanda is evading my challenge about him being a supplier to the mines while at the same time serving as Minister of Finance, says Fr Richard Luonde.

And the Anti Corruption Commission (ACC) says it has taken interest in the concerns by the public emanating from media reports linking Chikwanda to the business of supplying the mines.

Meanwhile, Chikwanda has maintained that the government is obliged to pay the mines and other exporters their VAT refunds.

Reacting to Chikwanda’s statement that he resigned from Africa Rainbow Minerals in 2010 before his appointment, Fr Luonde said the Minister of Finance is running away from the challenge he has posed.

“I never asked Mr Chikwanda about his old business connections with Africa Rainbow Minerals. What I am asking him is to explain the ethical morality of him being a supplier to the mines while serving as Minister of Finance,” Fr Luonde said.

He insisted that Chikwanda was a supplier to the mines and threatened to disclose the name of the company the minister was using for the transactions.

“What all the people are asking him is to state whether he denies having any interests in supplying to the mines. Let him come out in the open and deny. I am giving him 24 hours to do so and if he doesn’t, I will tell the Zambian people the name of the company he is using and where it is registered,” Fr Luonde said.

“Mr Chikwanda will render Zambia impotent if he is allowed to pay US$600 million to the mining companies and other exporters as he is proposing.”

Fr Luonde wondered why the minister was directing his reactions to the media when he was the one asking the questions.

“I am the one challenging him and I am waiting for his response. There is nothing he has answered in his statement and the question remains: deny that you are supplying to the mines,” said Fr Luonde.

And responding to a press query, ACC public relations manger Timothy Moono said the Commission was not investigating Chikwanda but was studying concerns from media statements linking the minister to the mines.

“I wish to acknowledge receipt of your press query in which you wanted to find out whether the commission has taken interest in investigating Mr Alexander Chikwanda regarding his alleged dealings with the mines. I wish to state that the commission is not investigating the finance minister, Mr Alexander Chikwanda,” Moono said.

“However, the Commission is studying concerns emanating from media statements. You will be informed of the outcome in due course.”

 
At 11:33 PM , Blogger MrK said...

Continued 1...


But Chikwanda said he had no interests in the mines as he had resigned in 2012 from the African Rainbow Minerals, which was an amalgamation of Harmony Gold and Anglo Vaal minerals.

“I worked with them up to 2010. They are a group of companies included in Konkola North now called Lubambe. But I resigned in 2010 from the group of companies. I am no longer with them. And essentially you see the politicking,” Chikwanda said.

“There are hints that it should have been somebody in the good books with the then government. I said ‘no, me I don’t operate in that way’. I operate strictly on the principles of ethics and I’m always above board in all my conduct. I resigned from that group, so I have no interest in the mining companies.”

He said the Ministry of Mines and many other economic ministries such as commerce and energy had the role of promoting investment in Zambia.

“The mining companies are the largest investors in Zambia and so the government has the moral duty to work with them [mining companies] in the country and to create an enabling environment for the sake of Zambia,” Chikwanda said.

“I issued a statement yesterday [Monday] which you may have seen and which the Zambian government-owned press did not pay attention to. When the Ministry of Finance issues a statement, they are supposed to pay attention, but they have not paid attention. But we will put it as an advert in the paper so that the public can have access to the information from government if our own media can’t even make reference to the statement. As Minister of Finance, I represent government. Running the economy is not an easy thing. It’s a public institution and the public is interested in knowing what we are doing and in which direction we are going.”

Chikwanda reiterated that he had no personal interest in the mining companies as reported by The Post and claimed that the newspaper was out to “crucify” him because it had an agenda.

“So friends, I have no personal interest. The Post has a crusade. When you listen to some of the exchanges and correspondence between the people at The Post and some politicians, you will see that they have to crucify some of us,” he claimed. “For reasons best known to themselves, we are supposed to be obstacles in their political ambitions and objectives. So every day you will see that because it’s something they have decided with their political collaborators.”


Chikwanda said everyone was free to go and see whether there was any irregular conduct on his part.

“The information they are talking about, the application of VAT rule 18, is lifted from a classified document. I cannot make reference to it because it’s government which classified that and it is not supposed to be in the hands of other people who are not government,” he said.

“Ordinarily, the law enforcement officers must take an interest and find out where The Post got that classified information.”

Chikwanda insisted that by law, the Value Added Tax refunds affected not only the mines.

“All exporters - whether they were exporters of sugar, like Zambia Sugar, exporters of cement like Lafarge and many other exporters, where the exports are zero-rated for tax purposes - refunds are supposed to be made,” he said.

“If they come up with necessary documentation, ZRA is supposed to make refunds. That’s the law, they are entitled to refunds. Nobody is saying that they should be exempted from paying, but if the law entitles them to refund, refunds must be made... That rule VAT 18, the difficult part for the exporters is where they are required to obtain documentation from the importers outside the jurisdiction of Zambia. That is where the difficulty is and that is what has caused this backlog of unrefunded VAT.

 
At 11:33 PM , Blogger MrK said...

Continued 2...


“Our friends who are on a crusade are giving things a twist to make it look like somebody is protecting the mines by saying the mines should not pay. No, I can’t exempt. Even the Minister of Finance doesn’t exempt people from paying tax just like that.”

Chikwanda said an exemption could only be offered through a statutory instrument, but no such statutory instrument had been issued.

“And before statutory instruments are issued, they are taken to the Attorney General’s chambers for verification and his opinion is sought. The Attorney General’s opinion is mandatory. If the Attorney General does not approve, you cannot proceed,” he said.

“So people are talking about things which are not true. They are attacking somebody over things which are a distortion. So that is that about this issue of VAT refunds. It does not only apply to the mining industry, but to other exporters. Refunds are made in accordance with what is provided in the law. The ZRA Commissioner General does not use an opinion, he follows the law strictly in administering refunds.”

On calls by the civil society that he be arrested, Chikwanda said such an action could only be taken if there was reason to do so.

“Civil society needs to arrest somebody if there is reason, and I think apart from a person being arrested or fearing to be arrested or not, it’s an issue of morality. You have to do things which are right,” he said.

“For us individuals, especially in the public offices, we should always stand on a high moral ground and not do things because of fear for this or that or because you will be discovered. Just do things which are right.”

Chikwanda said the position of Minister of Finance was critical.

“There is so much trust that is vested in you. For instance, under the provision CAP 3-349, any person that becomes Minister of Finance is incorporated as corporation sole. He is the shareholder on behalf of the President and government,” he said.

“That is what the law says about the powers vested in the Minister of Finance under the Ministry of Finance incorporation Act. So if you have that kind of trust vested in you, surely your actions must be grounded in morality.”

Asked whether he was considered a threat by the people he alleged were maligning him, Chikwanda said: “In fact, they themselves... We are privy to the correspondence in The Post, them themselves say so... target this man in the way they are describing as a cobweb or I don’t know what that means whether it is meaning uselessness or being an obstacle, hindrance to some people’s ambition. They themselves who are doing this are saying so.”

Meanwhile, later after he toured the L 400 and Lusaka Ring Road projects in the company of local government minister Emmanuel Chenda and other government officials, Chikwanda said coordination challenges in the rolling out of the project needed to be addressed.

“We are happy that the road projects are going very well but there are some challenges that need to be addressed,” he said.

“We have learnt a few things as ministers that will be need for better harmonisation and coordination. For instance, the Lusaka City Council, we had people from there but their presence was rather obscure, they took a back seat instead of being in the front seat. So these are some of the lessons. We need to harmonise and get everybody that is supposed to be involved in the road projects on board.”

Chikwanda was saddened that works on some portions of the roads being worked on had stalled, especially in Chawama, where only 800 metres had been paved.

And Chenda directed Road Development Agency chief executive officer Benard Chiwala not to leave out the Lusaka City Council in the execution of the road projects as it was party to the developmental agenda.

“It is ridiculous not to have the council work with the RDA in these road projects. The council is an important component in these projects. It’s really sad that there is no identity of the council as we are touring these roads,” Chenda told Chiwala, who had difficulties explaining the situation.

 
At 11:47 PM , Blogger MrK said...

Chikwanda evading my challenge about him being a supplier to mines - Fr Luonde
Edited by Abel Mboozi | Updated: 21 Aug,2014 ,13:59:03

Ministers Chenda and Chikwanda inspect Lusaka road projects yesterday - Picture by David Kashiki

ALEXANDER Chikwanda is evading my challenge about him being a supplier to the mines while at the same time serving as Minister of Finance, says Fr Richard Luonde.

And the Anti Corruption Commission (ACC) says it has taken interest in the concerns by the public emanating from media reports linking Chikwanda to the business of supplying the mines.

Meanwhile, Chikwanda has maintained that the government is obliged to pay the mines and other exporters their VAT refunds.

Reacting to Chikwanda’s statement that he resigned from Africa Rainbow Minerals in 2010 before his appointment, Fr Luonde said the Minister of Finance is running away from the challenge he has posed.

“I never asked Mr Chikwanda about his old business connections with Africa Rainbow Minerals. What I am asking him is to explain the ethical morality of him being a supplier to the mines while serving as Minister of Finance,” Fr Luonde said.

He insisted that Chikwanda was a supplier to the mines and threatened to disclose the name of the company the minister was using for the transactions.

“What all the people are asking him is to state whether he denies having any interests in supplying to the mines. Let him come out in the open and deny. I am giving him 24 hours to do so and if he doesn’t, I will tell the Zambian people the name of the company he is using and where it is registered,” Fr Luonde said.

“Mr Chikwanda will render Zambia impotent if he is allowed to pay US$600 million to the mining companies and other exporters as he is proposing.”

Fr Luonde wondered why the minister was directing his reactions to the media when he was the one asking the questions.

“I am the one challenging him and I am waiting for his response. There is nothing he has answered in his statement and the question remains: deny that you are supplying to the mines,” said Fr Luonde.

And responding to a press query, ACC public relations manger Timothy Moono said the Commission was not investigating Chikwanda but was studying concerns from media statements linking the minister to the mines.

“I wish to acknowledge receipt of your press query in which you wanted to find out whether the commission has taken interest in investigating Mr Alexander Chikwanda regarding his alleged dealings with the mines. I wish to state that the commission is not investigating the finance minister, Mr Alexander Chikwanda,” Moono said.

“However, the Commission is studying concerns emanating from media statements. You will be informed of the outcome in due course.”

But Chikwanda said he had no interests in the mines as he had resigned in 2012 from the African Rainbow Minerals, which was an amalgamation of Harmony Gold and Anglo Vaal minerals.

“I worked with them up to 2010. They are a group of companies included in Konkola North now called Lubambe. But I resigned in 2010 from the group of companies. I am no longer with them. And essentially you see the politicking,” Chikwanda said.

“There are hints that it should have been somebody in the good books with the then government. I said ‘no, me I don’t operate in that way’. I operate strictly on the principles of ethics and I’m always above board in all my conduct. I resigned from that group, so I have no interest in the mining companies.”

He said the Ministry of Mines and many other economic ministries such as commerce and energy had the role of promoting investment in Zambia.

“The mining companies are the largest investors in Zambia and so the government has the moral duty to work with them [mining companies] in the country and to create an enabling environment for the sake of Zambia,” Chikwanda said.

 
At 11:47 PM , Blogger MrK said...

Continued 1...

“I issued a statement yesterday [Monday] which you may have seen and which the Zambian government-owned press did not pay attention to. When the Ministry of Finance issues a statement, they are supposed to pay attention, but they have not paid attention. But we will put it as an advert in the paper so that the public can have access to the information from government if our own media can’t even make reference to the statement. As Minister of Finance, I represent government. Running the economy is not an easy thing. It’s a public institution and the public is interested in knowing what we are doing and in which direction we are going.”

Chikwanda reiterated that he had no personal interest in the mining companies as reported by The Post and claimed that the newspaper was out to “crucify” him because it had an agenda.

“So friends, I have no personal interest. The Post has a crusade. When you listen to some of the exchanges and correspondence between the people at The Post and some politicians, you will see that they have to crucify some of us,” he claimed. “For reasons best known to themselves, we are supposed to be obstacles in their political ambitions and objectives. So every day you will see that because it’s something they have decided with their political collaborators.”

Chikwanda said everyone was free to go and see whether there was any irregular conduct on his part.


“The information they are talking about, the application of VAT rule 18, is lifted from a classified document. I cannot make reference to it because it’s government which classified that and it is not supposed to be in the hands of other people who are not government,” he said.

“Ordinarily, the law enforcement officers must take an interest and find out where The Post got that classified information.”

Chikwanda insisted that by law, the Value Added Tax refunds affected not only the mines.

“All exporters - whether they were exporters of sugar, like Zambia Sugar, exporters of cement like Lafarge and many other exporters, where the exports are zero-rated for tax purposes - refunds are supposed to be made,” he said.

“If they come up with necessary documentation, ZRA is supposed to make refunds. That’s the law, they are entitled to refunds. Nobody is saying that they should be exempted from paying, but if the law entitles them to refund, refunds must be made... That rule VAT 18, the difficult part for the exporters is where they are required to obtain documentation from the importers outside the jurisdiction of Zambia. That is where the difficulty is and that is what has caused this backlog of unrefunded VAT.

“Our friends who are on a crusade are giving things a twist to make it look like somebody is protecting the mines by saying the mines should not pay. No, I can’t exempt. Even the Minister of Finance doesn’t exempt people from paying tax just like that.”

Chikwanda said an exemption could only be offered through a statutory instrument, but no such statutory instrument had been issued.

“And before statutory instruments are issued, they are taken to the Attorney General’s chambers for verification and his opinion is sought. The Attorney General’s opinion is mandatory. If the Attorney General does not approve, you cannot proceed,” he said.

“So people are talking about things which are not true. They are attacking somebody over things which are a distortion. So that is that about this issue of VAT refunds. It does not only apply to the mining industry, but to other exporters. Refunds are made in accordance with what is provided in the law. The ZRA Commissioner General does not use an opinion, he follows the law strictly in administering refunds.”

On calls by the civil society that he be arrested, Chikwanda said such an action could only be taken if there was reason to do so.

 
At 11:48 PM , Blogger MrK said...

Continued 2...


“Civil society needs to arrest somebody if there is reason, and I think apart from a person being arrested or fearing to be arrested or not, it’s an issue of morality. You have to do things which are right,” he said. “For us individuals, especially in the public offices, we should always stand on a high moral ground and not do things because of fear for this or that or because you will be discovered. Just do things which are right.”

Chikwanda said the position of Minister of Finance was critical.

“There is so much trust that is vested in you. For instance, under the provision CAP 3-349, any person that becomes Minister of Finance is incorporated as corporation sole. He is the shareholder on behalf of the President and government,” he said.

“That is what the law says about the powers vested in the Minister of Finance under the Ministry of Finance incorporation Act. So if you have that kind of trust vested in you, surely your actions must be grounded in morality.”

Asked whether he was considered a threat by the people he alleged were maligning him, Chikwanda said: “In fact, they themselves... We are privy to the correspondence in The Post, them themselves say so... target this man in the way they are describing as a cobweb or I don’t know what that means whether it is meaning uselessness or being an obstacle, hindrance to some people’s ambition. They themselves who are doing this are saying so.”

Meanwhile, later after he toured the L 400 and Lusaka Ring Road projects in the company of local government minister Emmanuel Chenda and other government officials, Chikwanda said coordination challenges in the rolling out of the project needed to be addressed.

“We are happy that the road projects are going very well but there are some challenges that need to be addressed,” he said.

“We have learnt a few things as ministers that will be need for better harmonisation and coordination. For instance, the Lusaka City Council, we had people from there but their presence was rather obscure, they took a back seat instead of being in the front seat. So these are some of the lessons. We need to harmonise and get everybody that is supposed to be involved in the road projects on board.”

Chikwanda was saddened that works on some portions of the roads being worked on had stalled, especially in Chawama, where only 800 metres had been paved.

And Chenda directed Road Development Agency chief executive officer Benard Chiwala not to leave out the Lusaka City Council in the execution of the road projects as it was party to the developmental agenda.

“It is ridiculous not to have the council work with the RDA in these road projects. The council is an important component in these projects. It’s really sad that there is no identity of the council as we are touring these roads,” Chenda told Chiwala, who had difficulties explaining the situation.

 
At 1:57 PM , Blogger MrK said...

Chikwanda must resign - Nawakwi
Edited by Misheck Wangwe in Kitwe

ATTEMPTS by Alexander Chikwanda to help mining companies in reclaiming tax repayments from government are a clear indication that we have a wrong man as Minister of Finance, says Edith Nawakwi.

In an interview yesterday, Nawakwi, who is FDD leader and former Minister of Finance, said there was complete disorder at the ministry and the manner in which Chikwanda was managing the country’s resources and revenues was extremely shocking.

She said reports that Chikwanda wanted to pay mining companies a disputed US$600 million as tax repayments were extremely disturbing.

She said Chikwanda must resign from his position because he could not serve the country diligently, as he had his own interests in the mines.

“Chikwanda is not doing us any good. The economy has no direction because of him. This is the same minister who gave tax relief to some mine to export copper concentrate. He is in a wrong place, at a wrong time and in a wrong period and decade. For now, all we can do is to just look at things and sympathise with ourselves and say ‘what have we done to God to deserve all this?’” she said.

Nawakwi said development in the country would only be inspired by Zambians and Chikwanda as Minister of Finance needed to be giving tax relief to local entrepreneurs and not the foreign mining companies.

She said some ministers were suppliers in the mines and the situation had made it difficult for them to execute their duties in the best interest of the nation.

“What is more disheartening is that Chikwanda removed some tax provisions for the churches and Non Governmental Organisations to access some tax relief. Churches such as the Catholic Church, the Seventh Day Adventists, United Church of Zambia and many other churches have institutions that supplement government efforts in the provision of social services. We woke up one morning only to hear that the Minister of Finance has issued Statutory Instrument number 103 which removed incentives to support the provision of social services. Now, today, we hear he wants to give tax refunds to the mines. This was very shocking and that’s why we have said Chikwanda is in a wrong job,” said Nawakwi .

 
At 1:44 AM , Blogger MrK said...

Fr Luonde challenges Chikwanda to explain his role in Sigma Enterprises
Edited by Chiwoyu Sinyangwe | Updated: 25 Aug,2014 ,15:40:04

WE are not being vicious by demanding that finance minister Alexander Chikwanda declares his role in Sigma Enterprises, a company that supplies to the mines, says Fr Richard Luonde.

Fr Luonde said Zambians were living dangerously by having a finance minister whose interest is to protect mining companies so that his supply business remains profitable.

He said it was betrayal of trust of Zambians and President Michael Sata for Chikwanda to continue as Minister of Finance while at the same time being an active shareholder in a company that is a supplier to the mines.

“The honourable minister should state clearly that he is not involved in Sigma Enterprises and if he tells us that and gives us proof, then, there is nothing wrong,” Fr Luonde said in an interview.

“That means he is serving as an honest person running the finances of the nation. But as things stand now, there is no independence. It’s like me as a priest, we are constructing a church and I become the biggest supplier within the church construction project. What picture am I trying to portray to the Christian followers? I am simply saying that I am there to benefit as a priest and not for the church to benefit. I would rather leave that to the Christians and in comparison to the Zambians.”

Fr Luonde said demands for Chikwanda to come clean on his dealings with the mines were genuine.

“People are saying we are trying to be vicious against the minister; this is the problem we have as Zambians,” he said.

“They are good and fast to believe what is not true and leave that which is true. As a priest, if I was to tell lies, there is no way I would rise against someone of that age of Mr Chikwanda, who is almost the younger brother of my father who died at 95 in 2010. So, to say it is a vicious campaign, [it] is not a vicious campaign. We just want to put things right in Zambia. What Zambia produces, all the resources are for Zambians. And when we talk about Zambians, we are talking about Hon Chikwanda, Fr Luonde and any other Zambian. We should all benefit from the cake of the nation. As beneficiaries, we must be sincere in our dealings. If I am asked to perform a duty that requires me to stay away from certain ventures, I will certainly uphold that decision because my interest is to serve the nation and I will come openly and say ‘I am not doing this’. But if I accept and on the other hand, I begin to do other things, then I have to be questioned. To question someone is not to hate someone; it’s not to destroy someone; it’s simply to put records right.”

 
At 1:45 AM , Blogger MrK said...

Continued 1...

He said Chikwanda needed rehabilitation.

“For someone to say it’s a vicious campaign; on what platform can Fr Luonde stand to become a Republican President? I am a priest; I am neither PF nor UPND; I am not MMD,” he said.

“All I stand for is the genuineness of those who lead us. As people who are led, we must question some of the decisions our leaders make and when we question these decisions, we are not saying we hate them. I stand on the truth. If the truth comes out, let it come out. If Hon Chikwanda is innocent, he simply says he is innocent. If he says it was an oversight, he says it was an oversight and the story ends. You will have put the record right. Some people could be complaining but in their complaints, they don’t come out. All they say is simply to cry foul. These are the people who do dubious things to hurt the nation. And sincere people like Fr Luonde will come out and speak and question some of the decisions that government takes and when that question comes, it’s not to the destruction of that person; it is to the reconstruction of that person. Those who want to do things the President does not entertain and want should leave. They should come out and say, ‘We are businessmen and not politicians’. It’s practically impossible to be policeman for the mining companies and at the same time do business with them.”


Fr Luonde said the mines would be more willing to give Chikwanda more contracts at the expense of other Zambian contractors because of the power he wielded.

“I would leave it to the Zambians to get involved in the supply to the mines rather than the leaders responsible, directly, controlling the finances of our nation to be involved,” he said.

“The [mines] will take advantage of those who are not known. He who pays the piper calls the tune. But as I talk about his involvement in Sigma Enterprises, if what I am saying is false, let him state so.”

Fr Luonde said it was betrayal of trust of Zambians for Chikwanda to entangle the nation in his private pursuit of business deals with the mines.

“If we are genuine, we are able to disclose what you are doing, especially if you are in a position of leadership for the benefit of those who we lead because once we open up, we are saying we are doing a genuine business,” Fr Luonde said. “But if we don’t open up, then that means there is something wrong.”

He said Chikwanda’s business with the mines could only flourish if the mines were also doing well.

“If I am renting out a house to somebody, I should make sure that that house is properly done and well-equipped so that at the end of the day, what I will receive from there will be equal to what I had put in,” he said.

 
At 1:45 AM , Blogger MrK said...

Continued 2...

“So, to an investor like the mines, I would want to ensure that they should not be disturbed until I gain and get what I wish to get. Chikwanda’s business cannot flourish if the mines are not flourishing and while common Zambians, including those who are suppliers to the mines, are sat on because the contracts will be given to a known person who in turn will also help those mine investors. And if he brings stronger policies against the mines, they will simply say ‘You are one of the suppliers and we shall not allow you to supply’. They will simply say ‘We are leaving’.”

Fr Luonde said there was too much impunity by mining companies, which was being encouraged by the closeness of some mining firms to top government officials.

“We are living dangerously as Zambians. The workers are being fired day in, day out; they have no protection. Look at Kansanshi Mines, where 71 workers were dismissed. This shows that we are not as independent as the owners of the resources that these investors are utilising. Few people are in control and this is inhuman and not right for Zambia,” he said. “In fact, maybe he [Chikwanda] is not the only minister supplying to the mines; we are going to research.

Those who don’t want to accompany the manifesto of the Patriotic Front and begin to involve themselves in private dealings with the mines, let them quit. We have a simple President who leads a simple life; the way he lived when he was in the opposition is the way he lives today. That is the kind of leadership we want. But once we have leaders who are like President Michael Chilufya Sata, Zambia, in the next 20 years, will be a heaven. The era of wastage, recklessness and thinking you are the champion of the world should not be allowed to occur. Those who want to get rich at the expense of Zambians are not in the right boat right now. President Sata is distributing wealth to all corners of the nation and he needs to be supported.”

Fr Luonde said days for Zambians to watch haplessly as their resources are being exploited were gone.

“For whatever coin, we should make sure that this money is returned into our nation’s account and the person responsible is the Minister of Finance,” said Fr Luonde. “So, to say we should respect more our investors, that is totally wrong. Investors should equally respect us by giving us what rightfully belongs to us.”

 
At 2:58 PM , Blogger MrK said...

Chikwanda admits having stake in Sigma, supplier to the mines
Edited by Chiwoyu Sinyangwe and Tilyenji Mwanza | Updated: 27 Aug,2014 ,14:07:50

FINANCE minister Alexander Chikwanda says he has a stake in Sigma Enterprises, a company which supplies to the mines, but the public should not be privy to the information.

And Chikwanda says President Michael Sata has not yet responded to his request to pay mining companies the US $600 million in VAT refunds.

Chikwanda yesterday released to the media the “declassified” letter he wrote to President Sata seeking permission to instruct Zambia Revenue Authority (ZRA) to limit regulation and documentation demand from key exporters seeking VAT refund.

During a press briefing yesterday, Chikwanda said his involvement in Sigma Enterprises should only have been a subject of public concern if the company was supplying to government departments or agencies.

“Sigma was established in the UK, it is a UK company incorporated 28 years ago. It is a successful trading company, they have a website you can check information. They supply many things to many companies, including mines not only in Zambia but other parts like Chile, and the amount of business that they manage from Zambia is a small component of their activity,” he said. “I have a stake in Sigma but at no time have we or my colleagues in Sigma solicited for orders. Read the website and see what we can supply and what we can source and there is no need to go to the mines to get leverage.”

Asked what level of business Sigma Enterprises generated from the time he assumed his position as Minister of Finance, Chikwanda said: “For the last two years, there is nobody from the management of Sigma who has been in Zambia going to the mines to go solicit for orders. They probably do not even need the orders in Zambia because they are doing very well supplying the mines in Chile, Australia and other parts of the world.”

Chikwanda said his involvement in Sigma did not amount to criminal acts or conflict of interest.

“Where is the crime to have set up a company 28 years ago in London...you just want to operate from the Petauke, from the village; you do not want a person to establish a company in London and in other parts of the world?

Yes I have a stake, but that is not information that people should be privy to. I have not asked you what stake you have in whatever company or a hair salon,” he said. “The rule is that we are supposed to fill in a declaration at the National Assembly and the company can operate as long as there is no conflict of interest and as long as the company does not make sales to government. Companies are free to do that. You cannot be criminalised to do that. I have an interest in Sigma and I have declared it to the rightful authority. I am not a majority shareholder; I am a minority shareholder but you do not get to declare what ‘they own stake in companies’, there are other authorities which can enforce that and certainly not your good self, just note that I have a stake... we are supposed to declare our interest, I have not denied, I have a stake. It is a trading company, it trades in other countries in the world and the mine in Zambia may just be part of it.”

 
At 2:59 PM , Blogger MrK said...

Continued 1...

And Chikwanda said the government has an obligation to pay mining companies in excess of US $600 million in uncleared backlog of VAT refunds.

“Government is by law obliged to refund [the mining companies]...ZRA have enough documentation and proof to know that they have to refund, that is all there is. What we are talking about on rule 18 is simply to streamline it,” he said. “It may not be the most practical thing to require documentation from importers outside the jurisdiction of our country. It is not intended to insulate mining companies against their tax obligation. This rule affects a lot of exporters and [there is a letter] from ZACCI [Zambia Chamber of Commerce and Industry] in which they tender legitimate complaints on the inconvenience they are subjected to not that they do not want to submit documentation so they can get refunds they are entitled to, the rule maybe a little too rigorous.

They are simply asking the [ZRA] Commissioner General to revisit the rule and we wrote to get guidance from our Head of State [but] in Zambia, things have become very complicated and we politicise things which are straight forward. There is nothing in the letter that says the mining companies should be tax exempt. What you need is a clarification on how the rule operates before people get a refund. They have to render some documentation to the satisfaction of ZRA, but you see the process at the moment is a bit too cumbersome and that is what is contained in that letter and that is what we are seeking in that letter for us to communicate with the Commissioner General for him to look at the matter.”

In a letter to President Sata, Chikwanda said Value Added Tax (VAT) general administration rule number 18 created uncertainty and undermined confidence in the domestic economy.

“Under Rule 18, the requirement to obtain information from importers outside Zambia’s jurisdiction has proved impractical and results in delayed processing of VAT refunds,” Chikwanda stated in a letter dated July 15, 2014 which was classified until yesterday. “For example, the uncleared backlog with the mines is in excess of US $600 million (K3.6 billion).

Since our fiscal space is severely constrained, we can clear this huge backlog by negotiating staggered payments with the mining companies after we have instituted a more prompt VAT refunds regime.

The rule creates uncertainty and undermines confidence in the economy.”

 
At 2:59 PM , Blogger MrK said...

Continued 2...

Chikwanda stated: “Your Excellency’s blessing is sought for the Ministry to instruct the Commissioner General, Zambia Revenue Authority to streamline Rule 18 so that it is limited to regulation and verification of exports and bank certification of export proceeds.”

Asked about President Sata’s response to his letter, Chikwanda responded: “No, we do not do things like that ba Sinyangwe naimwe. You do not get response from the President at gunpoint. If he deems fit, he will provide guidance. Government is a procedure and we will consult each other and that is why you see the Commissioner [General] is here. That is the way we work, we work smoothly. It is another political consultation and we have sought guidance and it will be provided in due course. What has been published in some media is shrouded in political motion to malign certain people and I happen to be the unfortunate victim. Government should be open and transparent. It is not supposed to be run in some mafia style. All our conduct and transactions must be totally above board and capable of scrutiny by the public.”

Chikwanda said mining companies that had taken ZRA to court for interpretation of the VAT rule were being excessive.

“There is no dispute between ZRA, those cases, it is probably excessive. If I were KCM and First Quantum, they should have continued talking to the ZRA to have the matters resolved. It is a quicker approach than going to court,” he said.

When asked why he was pushing for payments when cases had not been resolved both through ZRA internal processes and also by the courts, Chikwanda said: “Those cases which are before the courts, you cannot effect payment. The payments are stalled until court cases are over. The US $600 million is just meant as an example of what the mine’s claim has accumulated, which is subject to verification.”

He blamed the opposition to his stance on refunding the mines on internal power struggles in the ruling Patriotic Front.

“In the context of the party, there are some people who have ambitions which are legitimate but personally what I have said is it is permissible to harbour ambition [but] my advice is how we go about it,” said Chikwanda.

“Go to the grassroots, get accepted; use decent means of getting to your objective. We cannot outlaw ambition or people’s desire to contest for higher offices, especially those of you who are young enough have a legitimate right.

But any disunity can adversely affect the proceeds of our country because it endangers the nation.”

 
At 2:46 PM , Blogger MrK said...

ZRA objects to proposal on mines’ VAT refunds
Edited by Joseph Mwenda | Updated: 28 Aug,2014 ,14:14:42

ZRA has objected to finance minister Alexander Chikwanda’s proposal to pay mining companies and other exporters their VAT refunds.

According to Zambia Revenue Authority sources, ZRA has written to Chikwanda advising him that VAT Rule 18 must not be amended to allow the payment of tax refunds because of existing court cases over the matter.

“We are surprised that the minister actually went ahead to write to the President proposing to have ZRA streamline this regulation (Rule 18) against our advice,” the sources said.

According to the sources, ZRA technocrats held a meeting with the Chamber of Mines of Zambia on June 3, 2014 where it was agreed that no amendment should be made to Rule 18.

“According to this letter which ZRA wrote to the minister, it was made very clear that Rule 18 must be maintained as it was,” the sources said.

The letter to Chikwanda dated June 4, 2014 was copied to Secretary to the Treasury, Permanent Secretaries at the Ministry of Finance and other ZRA commissioners and advised:

“At conclusion of the meeting, and upon conclusion of the deliberations (with the Chamber of Mines) ZRA resolved that in light of the cases that are currently in court regarding Rule 18, and in light of the fact that the current provisions of Rule 18 are meant to strengthen the VAT system, Rule 18 should be maintained as it is.

The sources said it was therefore surprising to see Chikwanda’s declassified letter to President Sata dated July 15, 2014 seeking his blessings to have Rule 18 streamlined.

ZRA has withheld US$600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds, although Chikwanda is pushing to have the payments made.

“ZRA already gave its opinion to the contrary on that. The President is not a technocrat on these matters. We as ZRA are the technocrats and we resolved with our colleagues at Chamber of Mines. So if the minister needed further expert advice, he should have perhaps written to the Attorney General or sought other legal advice before writing to the President,” the sources said.

The sources said Chikwanda’s move to seek amendment to Rule 18 showed desperation which the President must question.

“Like the minister rightly put it, government has procedures that have to be followed, including consultation. So we find it strange that he did not include our opinion over VAT refunds in his letter to the President. That is what makes people think the minister is being impatient on this matter,” the sources said.

Chikwanda on Tuesday held a press conference at which he declassified his letter to the President seeking authority for his ministry to instruct ZRA to amend Rule 18.

“Your Excellency’s blessing is sought for the ministry to instruct the Commissioner General, ZRA to streamline Rule 18 so that it is limited to regulation and verification of exports and bank certification of receipts of exports and proceeds,” he stated.

Chikwanda, however, said President Sata had not yet responded to his proposal.

 
At 2:49 PM , Blogger MrK said...

Can you say - treason? How deep does this pro-mining rot go? - MrK

(LUSAKATIMES) Guy Scott moves to Chikwanda’s defence over VAT and shares
Time Posted: August 28, 2014 5:59 am

Vice-President Guy Scott with Finance minister Alexander Chikwanda before a meeting at State House on July 14,2014 -Picture by THOMAS NSAMA

VICE-PRESIDENT Guy Scott has said the repayment of Value Added Tax (VAT) owed to the mining companies is within the law and not something Finance Minister Alexander Chikwanda wants to cook up.

Dr Scott described the attacks on Mr Chikwanda as unwarranted and that the finance minister was above board on the VAT rule number 18.

“This matter has been discussed here in my office, at ministry of Finance and elsewhere, the payment is not voluntary but within the law, it is nothing that Mr Chikwanda dreamt up and requires change, it is within the law.

“We owe more money to the mining companies in VAT refund and we have to do something about it and not just leave it to accumulate or leave it to our next generation, the money is theirs,” Dr Scott said.

The Vice-President said the question at hand was how the country would pay back the money.

“If Mr Chikwanda did not make a declaration over his ownership in Sigma Enterprise, am sure it was an oversight on his part. I have been a minister before and I owned shares in some farms, in a consultancy company, its normal in this country and I don’t see any fuss about it,” Dr Scott said.

“It is payable unless the law changes it might not be payable, it has accumulated and that all the minister of Finance is talking about,” he said.

He said the issue of ministers owning shares in companies in Zambia was not illegal but that it was something that needed to be declared to relevant authorities.

“If Mr Chikwanda did not make a declaration over his ownership in Sigma Enterprise, am sure it was an oversight on his part. I have been a minister before and I owned shares in some farms, in a consultancy company, its normal in this country and I don’t see any fuss about it,” Dr Scott said.

He said there were no differences between the ministry of Finance and the Zambia Revenue Authority (ZRA) over the repayment of the VAT to mining companies.

“There maybe disagreement about practicality and opinions, but there can’t be disagreement that the money is owed, the way forward in future is to change the law, but the situation is that the money is legally owed,” he said.

He refuted claims there were factions within the Patriotic Front (PF) describing the speculations as not being worthy his comment.

“Just be careful on the source of information, any party in power usually has some funny people, but I will not comment on them until they are named. I am Vice president, my job is to ensure the party wins elections, the job which I am doing very well, we won Mangango and we are going to win in North Western Province,” he said.

 
At 4:18 PM , Blogger MrK said...

The mines agree with Minister Chikwanda - no surprise there.

(LUSAKATIMES) ZRA has an obligation to pay the outstanding VAT refunds-Chamber of Mines
Time Posted: August 30, 2014 9:30 am

FINANCE Minister Alexander Chikwanda unveils a plague while Zambia Revenue Authority (ZRA Berlin Msiska (second right) and Southern Province Minister Daniel Munkombwe look on during official opening) offices in Choma

FINANCE Minister Alexander Chikwanda unveils a plague while Zambia Revenue Authority (ZRA Berlin Msiska (second right) and Southern Province Minister Daniel Munkombwe look on during official opening) offices in Choma

Press statement from the Chamber of Mines
Zambia Revenue Authority, VAT Rule number 18(1(b)) should be amended and ZRA has an obligation to pay the outstanding vat refunds

We have been surprised by some media reports that appear to indicate that the chamber of mines (cmz) has reached an agreement with the ZRA to resolve a contentious issue relating to the non-payment of input vat to exporters by the ZRA.

In the report aspersions have been cast that the chamber of mines proposed to maintain rule 18 in its current form as it is meant to strengthen the vat system.

It is incorrect to characterize the issue of vat refunds as an issue for the mines alone. ZRA has been withholding refunds for all exporters, as evidenced by a letter from the Zambia chamber of Commerce and Industry to the Minister of Finance. This issue therefore concerns the entire economy.

The chamber recognizes that a number of other important sectors such as agriculture and manufacturing have been adversely affected by the current requirements by ZRA under rule 18(1) (b).

The chamber therefore regrets the cynical and gross misrepresentation being perpetuated that the issue of vat refunds only applies to the mining industry.

We wish to state the following;

1. The Finance Committee of the Chamber of Mines comprising the Chief Financial Officers (cfos) held a meeting with the Zambia Revenue Authority, present was the Commissioner General, Director Investigations, Director Large Tax Payers Office, Deputy Commissioner – customs services, and Acting Legal counsel at Revenue House

2. The purpose was to discuss the outstanding VAT refunds as provided in the law. The backlog has accumulated to over US $600million to-date

3. The meeting was also called to discuss the provisions of the value added tax rules of 1997, rule no 18(1). Rule 18 has been in effect since 1997 but this rule has never been fully enforced due to the impracticalities of doing so. However in
2013, the ZRA began to enforce this rule creating difficulties for exporters to reclaim their input vat.
The Chamber had proposed to the Zambia Revenue Authority that the requirement that exporters of goods and services should submit documents from importing countries be amended as we hold it that ZRA shipping inspection and documents are sufficient proof to demonstrate that an export of goods and services has taken place.

 
At 4:18 PM , Blogger MrK said...

Continued...


In particular, we are concerned that documents generated by the Zambia Revenue Authority are deemed as insufficient or inadequate to demonstrate proof of export.

Although ZRA expressed concern that some members of the chamber have taken ZRA to court and could not therefore deal with the tax refunds so far owed, the chamber held that the matters are separate and should be dealt with accordingly.

The cases in court relate to rule 18 which would automatically be resolved once the necessary amendment to the rule is enacted.

It is important to note that we have been making these submissions to all relevant authorities.

Zero rating of exports is not a tax incentive and is applicable across many countries. it is designed to promote the growth of export earnings through competitive pricing in the international market.
We wish to state that ZRA withholding tax refunds which exporters are legally entitled to, will render their products uncompetitive.

On 23rd October 2013, we submitted to the parliamentary expanded committee on estimates, among other things that rule 18(1) (b), be amended. The requirement that the exporter produces documents from the importing country was difficult to implement and comply to.
on 4th February 2014, we made another submission on the effects of withholding the refund of value added tax by Zambia Revenue Authority on metal exports by mining companies to the then acting secretary to the treasury, Mr. Felix Nkulukusa at the ministry of finance were we indicated the implications as follows:

1. Non-refund of VAT for the period august 2013 to date, to the tune of more than us$600 million has impacted both on the mining companies and the ancillary industries.

2. Severe liquidity crisis faced by the companies has resulted either in incomplete inability or delayed payments to suppliers and contractors.

3. Some operations are having difficulties in funding employees’ salaries

4. Slow down or complete stoppage of capital expenditure and improvement projects

5. Local suppliers unable to procure their imports

It is a well-known fact that copper exports follow a thorough documented procedure which is verified at the Zambian port of exit, through the ZRA’s Asycuda system. We hold that the documents produced by the ZRA to the exporter are sufficient and valid.

We also argued that the regulatory burden ZRA was giving itself would impede the smooth facilitation of trade and efficient handling of transactions.

In addition, we have, like every other sector, on 31st July 2014, made proposals for an amendment to rule 18(1) (b), as part of our submission on the mining sector national budget proposals for 2015 and also the 2015-2017 medium expenditure framework.

 
At 12:52 PM , Blogger MrK said...

Chikwanda must face tribunal - Fr Mwewa
Edited by Misheck Wangwe in Kitwe | Updated: 30 Aug,2014 ,11:00:40

FR Augustine Mwewa says there is need to request the Chief Justice to set up a tribunal to probe finance minister Alexander Chikwanda’s dealings with the mines.

Fr Mwewa, the former treasurer general of Catholic Diocese of Ndola, said only a tribunal could determine whether Chikwanda had abused his powers as finance minister following revelations that he has a stake in Sigma Enterprises, a company that supplies to the mines.

“These calls are not out of malice but out of fairness and transparency. We have known ba Chikwanda to be a distinguished man but the recent revelations about his attempts to pay US$600 million in tax refunds to the mines and the personal connections with the mines must be investigated and the matter must be logically concluded so that we can move forward,” he said.

Fr Mwewa said revelations that many ministers were suppliers to mines needed to be investigated because if the trend continued, many poor Zambians would not see the benefits of having foreign investments in the mines because of ministers’ personal involvement with the investors.

He said people serving as Cabinet ministers were expected to preoccupy themselves with issues of how Zambians would see benefits of their rich natural resources, instead of amassing wealth.

Fr Mwewa said although every citizen had a right to do business, those holding public office were expected to refrain from using their positions to influence business decisions for their selfish interests.

“On the part of ba Chikwanda, since he is a public servant as a minister, we want to know what kind of deals his company has with the mines and so on. Records must be set straight,” he said.

Fr Mwewa said there was need for an amendment to the law so that ministers could be regulated by a code of ethics when it comes to issues of doing business and getting contracts from mines and other sectors of the country’s economy.

Chikwanda is currently pushing the Treasury to release US$600 million Value Added Tax reclaims by mining companies.

ZRA withheld the US$600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds.

Recently, Chikwanda also pushed key legislation such as Statutory Instrument Number 89, which waived 10 per cent export duty on copper concentrates effective October 2013.

But SI 89 was revoked by President Sata, who said the decision was not in the country’s best interests.

Over the years, VAT refunds have exceeded what the mines contribute in mineral royalty and corporate tax to Zambia. This results in mines making a negative contribution to the Zambian Treasury.

 
At 12:59 PM , Blogger MrK said...

Mtayachalo calls for Chikwanda probe
Edited by Mukosha Funga in Lusaka and Cynthia Phiri in Ndola | Updated: 29 Aug,2014 ,11:46:39

YOUNG African Leaders Initiative says there is sufficient cause for President Michael Sata to revoke the appointment of finance minister Alexander Chikwanda in view of his recent actions.

And Copperbelt Province FDD chairman Yotam Mtayachalo has called on President Sata to constitute a tribunal to investigate Chikwanda’s dealings with the mines.

In a statement yesterday, YALI governance advisor Isaac Mwanza said the recent revelation of the letter by Chikwanda requesting the indulgence of President Sata to amend Rule 18 of the VAT Act (1997) pertaining to VAT refunds had given rise to very serious concerns regarding Chikwanda’s loyalty to the country.

He also stated that it was an interesting coincidence that Chikwanda was serving on the board of one of the mining companies prior to his appointment as finance minister.

“We are of the view that it would not be far-fetched to suggest that this explains Mr Chikwanda’s previous attempt to use his position as Minister of Finance to extend a new tax break to the mining companies by waiving the 10 per cent mineral export tax on mineral concentrates exported outside Zambia on the questionable pretext that Zambia lacked the capacity to process all our mineral ores locally,” Mwanza stated.

He stated that it was unacceptable for Chikwanda to shift the substance of the debate from the unfair and potentially harmful effects of the proposed waiver to a new topic of the notorious cartel allegedly promoting intra-party fighting within the PF.

“That is an internal issue for the Patriotic Front party and should not be allowed to cloud the debate over Mr Chikwanda’s letter as revealed in the media. Nor should the source of the alleged leak be allowed to take precedence over the potential harm to the interests of Zambia and Zambians, which could arise from Mr Chikwanda granting his proposed waiver,” Mwanza stated.

He urged Chikwanda to tell Zambians why he had taken keen interest in protecting the interests of the mining companies when he could not protect the interests of the Zambian people with equal zeal.

Mwanza called upon President Sata to make swift changes to his Cabinet and give the country a finance minister who has the interests of Zambians as the primary focus.

Meanwhile, Mtayachalo said Chikwanda should take leave to allow the investigation team to conduct a thorough job without interference.

 
At 1:00 PM , Blogger MrK said...

Continued...

He also implored the government investigative wings to be proactive and probe the allegations, dismissing Chikwanda’s claims that there was a cartel bent on pushing him out of Cabinet.

Mtayachalo said Chikwanda should not be allowed to divert the attention of Zambians on the matter.

Chikwanda had recently pushed key legislation such as Statutory Instrument Number 89, which waived 10 per cent export duty on copper concentrates effective October 2013. But SI 89 was revoked by President Michael Sata, saying the decision made was not in the country’s best interest.

First Quantum Mineral and Lubambe Copper Mines wanted the government to allow them to process copper-ores outside Zambia after differing with Vedanta Resources-owned Konkola Copper Mines over tolls for using KCM’s smelter.

Chikwanda is currently pushing the Treasury to release US$600 million Value Added Tax (VAT) reclaims by mining companies. ZRA had withheld the US$600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds.

Over the years, VAT refunds have exceeded what the mines contribute in mineral royalty and corporate tax to Zambia. This results in mines making a negative contribution to the Zambian Treasury.

Chikwanda also has some interests in Sigma Enterprises, a company that supplies to the mines.

“This is a serious matter and Fr Luonde’s allegations against Chikwanda are legitimate. The onus is on Chikwanda to prove his innocence because he has been asked to explain his company’s interest in the mines. Ministers supplying to the mines are disadvantaging the ordinary Zambian businessmen. There is a moral aspect in this matter. That’s why UNIP had a code of conduct for ministers,” he said.

“If Fr Luonde has more evidence, let him write to the Chief Justice so that she could be allowed to set up a tribunal to look into these allegations and ascertain if Chikwanda abrogated the law or not.”

Mtayachalo further wondered why Chikwanda removed tax provisions from churches and NGOs that were supplementing government efforts but seemed to be favouring mining companies.

“We have been following the Chiwanda issue with keen interest and we agree with what our president said earlier. If he has nothing to hide, let him go on leave and pave way for investigations so that his innocence can be proved because he has not given any reasonable response to the allegations against him,” said Mtayachalo.

 
At 12:53 PM , Blogger MrK said...

Police intelligence officers question Luonde
By Misheck Wangwe in Kitwe | Updated: 02 Sep,2014 ,07:47:32

FR RICHARD Luonde says he cannot be intimidated or silenced by police intelligence officers that interviewed him on the information he had about Alexander Chikwanda and his involvement with the mines.

And Fr Luonde says a tribunal to probe finance minister Chikwanda is the only way to put to rest allegations levelled against him on his personal business dealings with the mines as a supplier.

In an interview yesterday, the Kitwe-based Anglican priest said the intelligence wing of government visited him at his residence on Saturday and had a protracted interview with him from 10:00 hours to about 15:00 hours.

“I was visited by four officers, three from Lusaka and one from Kitwe. I recognised one man, a Mr Mweetwa. We sat in my sitting room and they asked me all sorts of questions, which I cannot divulge at this point but I want to say that as a priest, I have a prophetic role to play in society and I have a moral right to talk about these issues of allegations of corruption and so on,” he said.

“On the issue of Chikwanda, I will continue talking about it until the matter is logically concluded. It is my job to do that and the visit I got on Saturday from the government through its intelligence wings cannot intimidate me.”

And Fr Luonde said there was need to ask the Chief Justice to set up a tribunal to investigate Chikwanda so that issues that had been raised about him and his conduct could be logically concluded.

Fr Luonde said he had nothing against Chikwanda, but his conduct over the US$600 million that he was pushing the Treasury to pay the mines in Value Added Tax reclaims had raised serious concerns.

“I don’t hate Chikwanda and I have nothing against him. This is a matter of national interest and we are obliged to defend the interests of the people.

The tribunal is very critical on this matter because he admitted being part of Sigma Enterprises, a company that supplies to the mines. The issue of him pushing for the payment on VAT refund to the mines had also raised serious concerns because ZRA has withheld that money for quite sometime now and it is for a reason. We want to know whether the minister’s conduct is appropriate when there are personal interests attached,” said Fr Luonde.

Chikwanda is currently pushing the Treasury to release US$600 million Value Added Tax reclaims by mining companies.

ZRA withheld the $600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds.

 
At 2:19 PM , Blogger MrK said...

‘Only tribunal for Chikwanda will put things to rest’
By Misheck Wangwe in Kitwe | Updated: 04 Sep,2014 ,10:52:10

ZAMBIANS will only be convinced about President Michael Sata’s seriousness to fight corruption if Alexander Chikwanda is made to face a tribunal over his alleged personal dealings with the mines, says Advocacy on Human Development national coordinator Chris Mweemba.

And Mweemba says there is no need for the government to start panicking and begin to unleash police intelligence officers on people that are commenting on Chikwanda’s conduct like they did to Anglican priest Fr Richard Luonde over the weekend.

Commenting on calls to have a tribunal set up to investigate finance minister Chikwanda’s dealings with the mines, Mweemba said there was nothing sinister about people’s demands for justice to be done on allegations that had been levelled against a senior cabinet official.

“These issues are still burning in the hearts of many Zambians that want to see transparency and accountability in the manner business is conducted between government and the investors in the mines. We all want to know about that company that supplies to the mines, Sigma Enterprises, in which Mr Chikwanda has a stake. We want to know more about the US$600 million that the minister wanted to refund the mine investors when these investors have failed to meet their obligations on their part,” he said.

Mweemba said the Chief Justice must be requested to immediately set up a tribunal to investigate Chikwanda as it was the only platform on which his name could be cleared.

He said time had come for Zambians to begin to make leaders accountable for their actions and dealings while they were still holding public offices.

“There is no ill feeling or malice attached to these calls. We just want the truth to come out over this issue because we are talking about national resources, our minerals, which should not be manipulated by an individual or a certain clique for selfish gains. This has been the trend in Zambia over the years, and we just want to ensure that our finance minister is serving the interest of us Zambians,” Mweemba said.

And Mweemba said it was totally unnecessary and unacceptable for the government to send police intelligence officers from Lusaka to interview Kitwe-based Anglican priest, Fr Luonde, over the comments he had been making on Chikwanda’s involvement with the mines.

He said the state would not manage to intimidate and silence everybody because Zambians wanted answers for the concerns raised about Chikwanda and his conduct as finance minister.

“A tribunal to investigate Chikwanda is the only way this issue would be put to rest, and not intimidation or visits from the state’s intelligence officers,” Mweemba said.

Chikwanda is pushing the Treasury to release US$600 million Value Added Tax reclaims by mining companies.

ZRA withheld the US$600 million after mining companies failed to provide relevant documents to justify their claims for VAT refunds.

Recently, Chikwanda also pushed legislation such as Statutory Instrument Number 89, which waived 10 per cent export duty on copper concentrates effective October 2013.

But SI 89 was revoked by President Sata.

Over the years, VAT refunds have exceeded what the mine contributes in mineral royalty and corporate tax to Zambia. This results in mines making a negative contribution to the Zambian treasury.

 
At 5:31 PM , Blogger MrK said...

(LUSAKATIMES) Zambia Revenue Authority amends VAT General Rules
Time Posted: September 4, 2014 5:53 am

THE Zambia Revenue Authority (ZRA) has amended Rule 18 of the Value Added Tax (VAT) General Rules of 1997 to safeguard Government revenue with effect from September 8, 2014.

Meanwhile, ZRA withheld about K3 billion on account of tax-payers who declared zero-rated sales on exports but have not provided documents to the Authority as at July 31, 2014.

ZRA commissioner general Berlin Msiska said Rule 18 affects exporters and the mining sector.
This is according to a statement issued in Lusaka yesterday by ZRA corporate and communications manager Mumbuna Kufekisa.

Mr Msiska said Rule 18 ensures that VAT fairness in international trade is achieved by not subjecting exporters to VAT zero-rating while at the same time providing tax refunds of input taxes.

Mr Msiska said importers will also be taxed on the same basis and at the same rates as domestic suppliers.

“ZRA is considerate of stakeholder concerns in the administration of taxes.

“Rule 18 of the principal Rules is amended by the deletion of sub-rule (1) and the substitution thereof of the following: ‘Unless the commissioner general shall otherwise allow, a taxable supplier claiming that a supply is zero-rated under the second schedule to the Act on the grounds that the supply is an exportation of goods, shall produce to an authorised officer’,” he said.

Mr Msiska said a taxable supplier shall be required to provide copies of export documents for the goods, bearing a certificate of shipment provided by ZRA and tax invoices for the goods exported.

He said proof of receipt of payment for the goods and other documents will be required.

Mr Msiska also said that ZRA has paid out K762,747,465.47 in respect of tax-payers inclusive of the mining sector who have since provided the required documents.

He said refunds withheld on account of non-compliance with the existing Rule 18 can only be made when the legal documentation has been provided to ZRA.

Mr Msiska, however, advised tax-payers to adjust their supplies from zero-rated to standard-rated and apply 16 percent VAT rate.

“Consequently, non-compliance with the VAT rules on exports means that exporters are obliged to charge VAT at 16 percent on the supplies but will still be entitled to claim input VAT,” Mr Msiska said.

 
At 12:54 PM , Blogger MrK said...

(LUSAKATIMES) Chikwanda sues Anglican priest Richard Luonde
Time Posted: September 24, 2014 7:05 am

Vice-President Guy Scott with Finance minister Alexander Chikwanda before a meeting at State House on July 14,2014 -Picture by THOMAS NSAMA

Vice-President Guy Scott with Finance minister Alexander Chikwanda before a meeting at State House on July 14,2014 -Picture by THOMAS NSAMA

MINISTER of Finance Alexander Chikwanda has sued Anglican priest Richard Luonde for alleged defamation.

According to a statement of claim filed in the Lusaka High Court, Mr Chikwanda said Father Luonde caused to be published in the Post newspaper edition of August 18, 2014, a story headlined: “Chikwanda is double-dealing with the mines and eating with two hands.”

Mr Chikwanda claimed that other alleged defamatory stories that were published in the Post under headlines: “Fr Luonde challenges Chikwanda to explain his role in Sigma Enterprises” and “Zambians are living dangerously by having a Finance minister whose interest is to protect mining companies so that his supply business remains profitable,” were defamatory.

 
At 5:20 PM , Blogger MrK said...

Chikwanda’s disrespect of others shocks Lienda
By Roy Habaalu and Abel Mboozi | Updated: 28 Sep,2014 ,12:29:49 |

ALFRED Lienda says he is shocked by Alexander Chik-wanda’s disrespect of others. Lienda says the verbatim recording presented to the High Court by The Post last Wednesday confirms that the PF has been hijacked by charlatans. And Lienda says it is immoral for Chikwanda to deny that he directed the Zambia Revenue Authority to pursue The Post and leave out Zambeef.

In the recording, Chikwanda pours scorn on acting president Edgar Lungu, calling him a drunk and describing Vice-President Dr Guy Scott as a desperate man.

Lienda, a former commerce deputy minister in Frederick Chiluba’s government, said Chikwanda was one of the people that made Chiluba unpopular through his conduct. He said Chikwanda and his group didn’t have the same vision and love for the country that President Michael Sata had.

“PF has been hijacked by political charlatans. They are charlatans in the sense that they don’t carry the vision of their leader Michael Sata. I worked with Michael Sata, and he had a vision to do something for this country; we were together in the MMD. He had a vision [when] he formed PF in his own image. Now, for any charlatan to pretend that he can exactly do what Sata was thinking or had in mind is not true. It looks like it’s a struggle for power. That man [Chikwanda] can say whatever he’s saying to show that he’s much closer to the President. And maybe he’s reading the President’s health; just like what (sport minister Chishimba) Kambwili would say that he’s the President’s anointed one. So all these are just political charlatans, they don’t carry any vision for this country,” Lienda said.

He said with the corrupt and tribal clique in control, the country was headed for trouble. Lienda said after reading revelations by Chikwanda that the President was unwell, the charlatans had seen an opportunity to enrich themselves.

“PF with (Wynter) Kabimba was ticking, but many people did not understand Kabimba. That man was not sleeping one week in Lusaka. And that is typical of how a secretary general is supposed to be. And I’m sure he was under instructions (from President Sata) to do whatever he was doing. But the misconception was that he did not mean well, that he is controversial. So let’s wait and see. But we are in trouble! Those revelations I am not comfortable. And very shortly they’re going to vindicate Kabimba that [he] is just the right person,” he said.

 
At 5:20 PM , Blogger MrK said...

Continued...


President Sata last month dismissed Kabimba as justice minister and PF secretary general. Lienda said Chiluba realised quickly that Chikwanda and others didn’t mean well and removed them from government. He said Chikwanda was abusing his relationship with President Sata to scare others.

“Those people even under Chiluba they never went a full distance. Maybe Chiluba was too sharp to cut what he (Chikwanda) was doing that time; he dismissed him early. But in this one, maybe because of the relationship or other tribal inclinations, maybe he [President Sata] thought this man [Chikwanda] can do better by giving him a responsibility,” Lienda said.

He said Chikwanda and his group were in government to make money ‘whilst the sun shines’.

“These people just want money, and once they make their own money, damn it! Even if anything happens, so what? So we are going to see a lot of victimisation in certain areas. People will be victimised seriously to make way for the aspirations of other people,” Lienda said.

He said if Chikwanda had morals, he would have resigned after the verbatim of the recording was published.

Lienda said none on the charlatans would be successful as they had no leadership qualities.

And commenting on Chikwanda’s statement on ZNBC’s Friday evening news where he denied interfering with the work of ZRA, Lienda said the finance minister’s directive that ZRA should pursue The Post instead of Zambeef is tantamount to abuse of office.

“It is actually immoral for Chikwanda to deny that he directed ZRA to pursue The Post and leave out Zambeef. In fact his directive to them [ZRA] is tantamount to abuse of office. ZRA has professionals who should be left alone to execute their duties professionally devoid of directives,” he said.

Lienda said he was surprised that Chikwanda was now growing cold feet over his decision.

“Why is Chikwanda developing cold feet? Does he know what he wants to do? Leaders must stand by their words,” said Liyenda. “Once a leader makes a statement, it must be credible enough and they must stand by the truth. A leader should not run away from the truth. That’s what we expect from our leaders.”

 
At 8:47 PM , Blogger MrK said...

This is excellent news. That's $600 million that won't end up in the pockets of the mining companies.

(ZAMBIAN-ECONOMIST) The Mining VAT U-turn

Government appears to have completely U-turned on the $600m VAT refund to exporters, with the larger bulk owed to mines and other exporters. ZRA says the U-turn is due to "widespread concern on the matter".

Minister Minister Chris Yaluma says "ZRA will do what they think is right and like they said, they have got the autonomy to run as best as they can to ensure all needed revenues are collected...They are trying to do what they can do best in the interest of the country.” (Source: The Post). No word from Alexander Chikwanda but it appears the U-turn may have President Sata's backing.

Mopani Copper Mines revealed last week that it is owed about $200 million in VAT refunds by GRZ because it has "failed to comply with a rule requiring them to supply import documents from the country their exports end up in". It says it can’t provide the papers because it sells to traders and don’t know the final destination of the metal (Source: Bloomberg)

There are fears that the ongoing stand off will lead stalling of investment in the medium to long term, possible job losses. Mopani, a unit of Glencore, the world’s third-largest miner by market value, is undertaking a $323 million investment at its Nkana mine near the Zambian city of Kitwe. The unit currently employs over 20,000 employees in Zambia.

The Chamber of Mines has said that non-payment of the withheld VAT refunds have had and continue to have a major adverse impact on the operations of the mining companies.

In a statement last week it said, "the cash flows have been seriously constrained following the withholding of the refunds resulting in many mining companies suspending, deferring, and cancelling capital projects among other undesirable actions to keep operations going..The effects of these actions are already being felt in the medium to long term, there will be a negative impact on mine production, production costs, suppliers of goods and services to the mining industry” (Source: Daily Nation).

 
At 8:48 PM , Blogger MrK said...

Continued...

Mining companies have a long list of policy measures they would like Government to remove. These include : the export duty on semi-processed copper products;import duty on various copper products: Rule 18 of the Value Added Tax Act under Commissioner General’s Rules requiring proof of export for VAT zero-rating purposes; capital allowances for mining investment; and road tolling charges on inter-mine transportation of products for processing.

The Fitch Rating recently gave a positive outlook for Zambia's economy largely off the back of what it regarded as a "positive steps" GRZ has been taking in addressing mining regulatory issues, include the decision to remove VAT rule. There is also the ongoing negotiations with the IMF for a bailout programme. The IMF have previously called for the VAT refunds. It is not clear how much the IMF will tie its negotiations to mining regulatory reform. But it does seem that Fitch may have jumped the gun somewhat.

The Fitch revision is largely down to the calmness in the Kwacha which is heavily tied to the IMF negotiations with Zambia for a new austerity programme. The IMF will most likely make the VAT refunds a condition of their engagement. If Zambia does not comply in that area and push more deregulation it is likely the IMF programme will not be taken forward and consolidation may not occur. There are already strong fiscal risks even with the rebasing. So Fitch may have jumped the gun.

The real question is how much all of this may have the blessing of State House. President Sata recently signalled some displeasure with inconsistency between Chikwanda and Yaluma on mining taxation policy. It is a wait and see policy for now. However, it is unlikely the Budget 2015 will move us further on clarifying the way forward on various mining issues.

AUTHOR
Chola Mukanga
Economist | Researcher

 
At 11:57 AM , Blogger MrK said...

(THE POST) Chikwanda and mines taxation
By Editor | Updated: 29 Sep,2014 ,11:24:49 | 727 Views

“If you see something, say something.” That is the mantra that the United States Department of Homeland Security plays over and over on loud speakers in airports and railroad stations.

Well, we have seen and heard something about the taxing of mining corporations, and many Zambians have, too. What we have seen is not a suspicious package left under a stairwell. What we have seen is hiding in plain sight. We have seen something that poses a great threat to the development of our country and the efforts to lift the majority of our poor people from poverty. We have seen gigantic amounts of money being lost in mining taxes.

A Zambia Air Force jet pilot friend of ours told us about a strategic doctrine he learnt while training with the United States Air Force called the OODA loop, which stands for “Observe, Orient, Decide, Act.” He told us that this strategic doctrine argues that when you are a fighter pilot, if your OODA loop is faster than the other pilot’s, you will always win the dogfight. Borrowing from what our Zambia Air Force friend taught us, our country’s OODA loop is far too slow and discombobulated. In our political discourse today, there is far too little observing, orienting, deciding and acting and far too much shouting, asserting and dividing.

In the complex world we live in today, and especially when it comes to dealing with gigantic mining transnational corporations, the speed with which we can effectively observe, orient, decide and act matters a lot.

There is no doubt that we are failing to get the most out of the mining operations going on in our country. Every honest person and institution is telling us this. The International Monetary Fund is telling us this. The World Bank is saying the same thing to us. Our bilateral co-operating partners are singing the same song to us. Are they all wrong? Is Alexander Chikwanda listening to them or he is too intelligent to listen to anybody else other than his own inner demons? Is everyone who is raising these concerns a lunatic?

The truth is things are not well or as they should be with the taxing and regulation of the mining transnational corporations. And things have now gotten to a point where they cannot be ignored, and have to be effectively addressed.

It all started with Chikwanda’s promotion and defence of Statutory Instrument 89, which President Michael Sata had to revoke because it was not in national interest. Through Statutory Instrument 89, the mines were able to export unprocessed or semi-processed minerals whose value, for tax purposes, could not be efficiently and effectively determined. And there is no doubt, as President Sata correctly observed, the country was losing millions or billions of dollars every year through the export of “soil”.

 
At 11:57 AM , Blogger MrK said...

Continued 1...

Chikwanda didn’t see anything wrong with this. When this Statutory Instrument of his was denounced by the President, Chikwanda simply kept quiet as if nothing had happened, as if it was something bequeathed to him by some distant uncle and not a product of his own hands. What type of person is this?

As if Statutory Instrument 89 was not enough, Chikwanda later comes up with the removal of the Value Added Tax Rule 18 to allow mining corporations to claim VAT refunds without providing any meaningful documents showing proof of mineral exports and their destinations. The argument to justify this was that the process was impracticable; it was not possible for the mining corporations to provide the documents required given the volume of exports. We all know that this is nonsense. Most of these mining corporations export to one customer and destination. We have a large bulk of our copper that is supposed to be shipped to one customer in Switzerland. What is the problem with collecting documentation from that one customer in Switzerland? The truth is the documentation is not there because that copper does not go to Switzerland; it goes somewhere else in the Far East. And as such, documents of those minerals being exported to Switzerland can never be there.

We challenge Chikwanda and his friends behind the removal of Rule 18 to look at the large volume of documentation a British exporter has to deal with in order to export to the European Union. Why do you think the British authorities are demanding that amount of documentation? It is for tax administration purposes. But here, we are being told by Chikwanda and his lackeys that such a process is impracticable.

The other truth is there has been no meaningful compliance with Rule 18 by the mining corporations. And without this compliance, one wonders how they were allowed to continue to have the zero-rated status that allowed them to claim VAT refunds. This is a clear case of tax fraud and evasion. And here we are not talking about small amounts of money being lost every year by the Zambia Revenue Authority. We are talking of billions of dollars being lost every year through tax fraud. And Chikwanda’s action on Rule 18 amounts to an attempt to legalise this tax fraud. Why? Is it because of incompetence on Chikwanda’s part? Or is it simply an oversight? No, it is deliberate and conscious. Chikwanda knows what he is doing and it benefits him to do what he is doing.

 
At 11:58 AM , Blogger MrK said...

Continued 2...

Most of these mining corporations have tax demands before them from the Zambia Revenue Authority amounting to millions and billions of dollars. Have you heard any enforcement of these demands by the Zambia Revenue Authority? Have you heard Chikwanda get so concerned, so worked out by the tax liabilities of these mining corporations the way he has been concerned and disturbed by the K13 million of principal taxes of all sorts owed by The Post? Chikwanda, for this amount, was ready to have The Post closed and its more than one thousand employees left jobless and pushed on the streets. But he is not ready to do anything about the tax liabilities of the mines. He is not even talking about it publicly.
What type of person is this?

And it is this same Chikwanda who is going out borrowing huge amounts of money for the country’s infrastructure development, and to some extent for paying the VAT refunds of the mines. Why should we borrow when we can collect the legitimate taxes due to us and which are far more than the money we are borrowing? It is simply because it benefits Chikwanda to leave the mines alone and to go out and borrow.

This is not cheap politics. This is serious business. The matters we are raising here can be proved. If we are lying, we challenge Chikwanda and the Zambia Revenue Authority to dispute what we are saying and we will take them on with facts that are beyond dispute.

Where is the efficiency and effectiveness of the Zambia Revenue Authority when it comes to collecting taxes from the mining transnational corporations? Can they act the way they acted against us last week when it comes to the mines, who owe far much more than we do?
These issues cannot be ignored and they cannot also be effectively addressed without collective action and commitment.

We will not be able to deal with the mining corporations effectively if our political system continues to be paralysed and our system of values continues to be dominated by those of Chikwanda and his lackeys at Zambia Revenue Authority and in other places.

But we have no alternative to taxing the mines in an efficient, effective and orderly manner. We do not have the resources or the time to waste with the high poverty and unemployment levels that our people have to every day endure.

It is also clear that our politicians are not properly framing, let alone addressing, our ultimate challenge with the regulation and taxation of mines. Strictly speaking, we need external help to deal with the taxation and regulation of the mines. As things stand today, the efficient and effective regulation of mines seems to be beyond us. And this is compounded by corruption in the institutions of the state that are supposed to regulate the mines. Look at what was happening at the Ministry of Mines, where every senior civil servant was a director at this or that mine, sometimes even travelling abroad for board meetings. Look at the policies that have been coming from Chikwanda and his Ministry of Finance! Look at how carelessly ZCCM-IH has been putting forward its money for use by these transnational corporations! The whole issue is a scandal. And Chikwanda is the overseer of all this mess, this veritable chaos. If Chikwanda had any sense of pride in himself, he would have resigned a long time ago. We say this because a man with pride cannot be denounced in the way he has been over Statutory Instrument 89 and the humiliation he suffered over the reversal of his decision to remove Rule 18. Chikwanda has no shame or pride. Why? This is the question the Zambian people need to find an answer to.

 
At 1:01 PM , Blogger MrK said...




Elias Chipimo and his NAREP are just more bribetakers waiting to fill their pockets when they get into office. This defense of stealing $600 million of BORROWED money from the taxpayers should be be deathknell fo his political career. Also see here.

‘Chipimo being selfish on VAT Rule 18’
By Abel Mboozi and Gift Chanda | Updated: 02 Oct,2014 ,12:13:42 |

ERIC Chanda says Elias Chipimo and the Chamber of Mines of Zambia are exhibiting high levels of selfishness to support calls by mining companies and other exporters to be refunded US$600 million under the Value Added Tax Rule 18.

And Chanda, the Fourth Revolutionary party president, has challenged Mopani Copper Mines chief executive officer Danny Callow to produce proper documentation before he can claim that the mining company is owed US$200 million in VAT refunds.

Meanwhile, ActionAid says the calls to revoke VAT Rule 18 has not been backed with strong, substantive and convincing grounds.

During a press briefing on Sunday, Chipimo defended finance minister Alexander Chikwanda over his attempts to refund mining companies and other exporters through VAT Rule 18.
But Chanda said Chipimo and the Chamber of Mines of Zambia must begin exhibiting patriotism.

“They must exhibit true patriotism and be true sons of our country, mother Zambia. It is unfortunate that Zambian politics and leadership tend to be in wrong hands, muminwe ya bakandile [in the hands of opportunists], who want to take their personal interests first at the expense of the country and its citizens,” he said.

“…Now, I really don’t know if Zambians are ready to entrust leadership in such people. It is a shame on Chipimo, it’s a shame on the Chamber of Mines of Zambia, and they do not deserve to be in leadership circles of this country.”

Chanda said every well-meaning Zambian should stand up to defend what belongs to the country.

“Zambia is our only country and every well-meaning Zambian with five senses should stand to defend our country at all the times,” he said.

“I want to tell my elder brother Chipimo and the CMZ that unless proved to the contrary, these exporters have not fulfilled the requirements of the law as regards to VAT Rule 18 and as such, they do not qualify for any refund.”

 
At 1:02 PM , Blogger MrK said...

More...

Chanda said President Michael Sata should not tolerate people taking advantage of mining houses to benefit from VAT Rule 18 refunds.

And Chanda said Callow should prove to Zambians that Mopani Copper Mines had met the requirements of VAT Rule 18 for the mine to qualify for the refund he was claiming.

“Let Callow prove his point rather than just him saying his company is owed US$200 million through VAT refunds. If he fails to prove, then the mine has no right to this refund,” said Chanda.

Callow on Tuesday said the continued withholding of VAT refunds, despite the company having provided all the necessary proof that the copper it produced was exported using the ZRA asycuda system, continues to have a negative impact on its operations.

He said the company had since suspended some projects at its mines due to financial constraints.

“As much as we are determined and focused on ensuring that works on the projects progress, I would like to express my concern and distress that the continued withholding of our value added tax refunds to the tune of US$200 million to date may force us to close down progress on these projects,” claimed Callow.

And ActionAid Zambia said there has been no explanation as to why it was difficult for mining companies to disclose the information and documentation required.

“On the other hand, there is now a lot of documentation and evidence of where Zambian copper, for instance, is exported to on paper and where it actually ends up in reality,” it stated.

The charitable organisation, which has been instrumental in pushing for tax justice in Zambia, said it was clear that Zambia was being exploited by multinational companies who take advantage of the loopholes in the country’s tax system and VAT refunds were no exception.

ActionAid said it was concerned that those calling for the removal of the VAT Rule 18 were not suggesting alternative ways of addressing the challenges that the rule was meant to address, which had resulted in the country haemorrhaging colossal sums of much needed revenue.

“The sincerity of such stakeholders is questionable, particularly that many ordinary Zambians are not benefitting from our national resources as evidenced by the high poverty levels the country continues to experience and the high levels of borrowing to finance development projects,” it said.

“Multinational companies regularly deprive Zambia of vital money that could be used for much needed public services such as education and health. Measures must be taken to close the tax loopholes that facilitate this, and not implementing VAT Rule No. 18 deprives us of the revenue we need to provide basic services for majority of our citizens.”

To allay fears that the country will incur unnecessary debt as is being argued by some stakeholders, the organisation proposed that the government undertake a comprehensive and transparent validation process of the VAT refund claims under dispute to ascertain the validity of the claims, the challenges faced by companies in obtaining documentation relevant for reclaiming VAT and justification of the requirements under VAT Rule 18 regarding the conditions which should be met by exporters in order to qualify for VAT zero rating of exported goods.

 
At 7:40 PM , Blogger MrK said...

(ZAMBIAN ECONOMIST) VAT refund crisis

Glencore (owners of Mopani Copper Mines) last week halted operations at its Sable Zinc Kabwe mine because of withheld valued-added tax refunds owed to the company. Mopani has also suspended part of an $800 million plan to boost production of copper by 50 percent.

The Zambia Revenue Authority has held back on paying mostly mining companies more than $600 million VAT refunds, because it says exporters haven’t complied with a rule requiring import documents from the countries the products end up in. Mopani alone is owed more than $200 million in refunds.

We must not forget that GRZ through ZCCM-IH owns 10% shares in Mopani Copper Mines. Though we should also remember that MCM has never declared any dividends to ZCCM-IH. There was talk a year ago of GRZ completely exiting ownership of mining companies and instead raising the taxation levels. But that was rolled back.

Incidentally for all the talk of Chikwanda having shares in mining companies people forget that GRZ's mining taxation policies have always been complicated by the shares it owns in some of these mining companies. It partly struggles to set an optimal mining tax across the piece because it is always thinking about its shares.

There other reasons of course but it does point to the need for a Green Paper on mining policies which can allow people to input into the policy development. Then a White Paper can then be published. Only then are we going to have a Zambian policy that rather than a policy of the party of the day.

AUTHOR
Chola Mukanga
Economist | Researcher

 
At 6:17 PM , Blogger MrK said...

Nawakwi questions Chikwanda’s tolerance of corruption
By Kombe Mataka | Updated: 06 Oct,2014 ,15:54:25

Nawakwi questions Chikwanda’s tolerance of corruption

EDITH Nawakwi says revelations by finance minister Alexander Chikwanda that corruption from Chinese contractors was irresistible should not be tolerated.

Chikwanda recently told his friends during a meeting in his office that Chinese contractors were masters of corruption and that their bribes were difficult to resist.

“The cost at which the Chinese are affecting these projects, especially the roads, is very worrying. They are allocating huge gifts. These Chinese, twaliba sana ntwenukani, etwaishiba sana corruption (The Chinese are very craft, they are masters of corruption),” said Chikwanda.

But Nawakwi, who is former finance minister, questioned Chikwanda’s tolerance of corrupt activities among government officials.

She wondered why the finance minister was tolerating the corruption happening in his face.

“I have been reflecting on why we have so much money for roads. The Minister of Finance has said the Chinese are busy tempting government officials with parcels of cash. This explains why the bulk of the money is going into road construction,” she said.

“Chikwanda is saying that these ministers are corrupt, they are getting money from the road contracts, and he is watching. That is why I have been saying that Chikwanda should leave that ministry [of finance] but he is refusing.”

Nawakwi said Chikwanda’s revelation was an indication that ministers and government officials managing the road sector were siphoning money through contracts.

“This is one open trap where our government officials and ministers are able to siphon money through contracts, and this is not even an accusation.

Chikwanda has clearly laid everything bare that there is corruption in government and I think this should stop,” she said.

Nawakwi, who is also opposition FDD president, called for fiscal discipline and prudence in the management of national resources.

“I don’t know why they are treating the people of Zambia like this. There is no proper health, no proper education. I feel very saddened. I believe that if you provide scholarships, there is no way of siphoning money into private pockets,” she said.

And Nawakwi said in an interview on Thursday that she was surprised that Chikwanda was among those that were saying she did nothing when she served as finance minister.

“Chikwanda went into office and found mountains of money and he has dismantled it for things we can’t even see. How can this government be building a road like Chingola-Solwezi road so that these mines who are his friends can benefit when they can be made to bankroll railway projects?” wondered Nawakwi.

“It is important for him to build a road to Chingola from Solwezi with public money for private companies to use. You know that kind of thinking is bogus and archaic and does not exist in any book of economics. This man has continued to bankrupt us to the point of where our future is bleak.”

 
At 6:51 PM , Blogger MrK said...

(LUSAKATIMES) Glencore-owned Mopani accused of trying to force Government to relax VAT refund rules
Time Posted: October 6, 2014 1:03 pm

FILE: Action Aid Zambia Country Director Pamela Chisanga addressing protestors

ActionAid Zambia has accused Glencore-owned Mopani Copper Mines of trying to force the government into relaxing its VAT rules by suspending its zinc operations and cutting 169 jobs in Zambia amid a $600m row over VAT refunds to the country’s mining companies.

In a statement released to the media, ActionAid Zambia Director Pamela Chisanga said that the VAT rules provide the government with an important tool for tackling tax avoidance.

Below is the full statement

ActionAid Media Statement

06 October 2014

Glencore accused of strong-arming Zambian government over tax row

“Glencore’s decision to halt its zinc operations and cut jobs in Zambia looks like a shameless attempt to strong-arm the government into relaxing its VAT rules, which provide the government with an important tool for tackling tax avoidance.

“The Zambian government has every right to demand companies prove they aren’t avoiding taxes by selling the country’s assets at reduced prices. Zambia is one of the world’s poorest countries and desperately needs tax revenues to build public services and grow its economy.

“Exporters like Glencore claim to have legitimate objections to Zambia’s VAT rules, but they must not try to force the government’s decision through these heavy-handed tactics. The government should stand firm and ensure that some of the world’s biggest mining companies, pay their fair share of tax.”

Mining companies and other exporters have opposed current rules that require them to provide documentation of the receipt of exports in order to receive VAT refunds from the government. This documentation can be used to identify whether exports are under-priced, a common tool for avoiding taxes.

Mining companies in Zambia have said it is impractical for them to implement the rules, and note that whilst they have been in force since 1997 the government has only sought to enforce them since 2013. Campaigners in Zambia have countered that the mining companies have provided no explanation as to why it was difficult for them to disclose the documentation required.

In the upcoming national budget, the government may decide to scrap the current requirements in response to opposition from exporters, including the mining companies.

The UK-Swiss mining giant’s operations in Zambia have long been highly controversial, following a leaked audit of its Mopani mine which alleged the company had been under-pricing its copper exports in order to avoid taxes. ActionAid estimates that this one company’s tax dodge could have cost Zambia up to £76 million in one year alone – more than Zambia receives in UK aid each year.

ActionAid wonders why the report done by the European Investment Bank (EIB) on these allegations has not been publicised even when various stakeholders have been pressurising the EIB to release even just the abridged version. ActionAid therefore calls on the EIB to immediately make public the report on Mopani and further requests the Delegation of the European Union in Zambia to assist in getting the report released so that Zambian citizens and stakeholders are informed of the outcome of the investigation.

 
At 6:51 PM , Blogger MrK said...

(LUSAKATIMES) President Sata called upon to warn mining companies
Time Posted: October 7, 2014 2:32 pm

File:President Sata being welcomed by Speaker of the National Assembly Dr Patrick Matibini during the opening of parliament on September 19, 2014 -Picture by THOMAS NSAMA

Republican President Michael Sata has been called upon to issue a stern warning to mining companies intending to lay off workers using the excuse of the withheld VAT refunds.

Christian Against Poverty in Zambia (CAPIZ) Executive Director Evangelist Gregory Chileshe told QFM News in an interview that President Sata should issue a statement warning all mining companies threatening the jobs of miners.

Evangelist Chileshe said as the country continues to strive in meeting the Millennium Development Goal (MDG) on reducing extreme poverty by 2015, such moves should not be tolerated considering that they cannot help in attaining the MDGs.

He also appealed to investors in the mining sector to exercise patience with government with regards the issue of the VAT refunds.

Evangelist Chileshe further encouraged government to be above bold and not succumb to tactics of arm twisting some mining firms are employing.

He added that Zambia should use its natural resources wisely by reducing the high poverty levels in the country.

Evangelist Chileshe said it is for this reason that Zambians, more especially miners who are on the edge of losing jobs, are looking up to President Sata to issue a decisive statement pertaining to the threats by mining companies.

Meanwhile, opposition Alliance for Better Zambia (ABZ) President Father Frank Bwalya has advised government to increase its stake in the mining companies.

Father Bwalya is also of the view that repossessing the mines is the solution to the problems arising in the mining sector.

 
At 10:01 AM , Blogger MrK said...

Chikwanda to abolish current mine tax regime
By Staff Reporters | Updated: 09 Oct,2014 ,14:30:40

ALEXANDER Chikwanda has decided to abolish the existing mining tax regime and replace it with a mineral royalty-based system, Ministry of Finance sources have disclosed.

And Chikwanda wants to sell off 27 per cent shares from the government-owned Zambia Consolidated Copper Mines Investment Holding to private individuals and interested institutions.

Meanwhile, Chikwanda plans to disband the entire Zambia Wildlife Authority (ZAWA) and replace it with a new department under the Ministry of Tourism, which will take over its operations.

The finance minister is tomorrow expected to present the 2015 budget of about K46 billion which, if approved, will be K4 billion bigger than the current one.

Sources at the ministry disclosed that Chikwanda wants to use next year’s budget to simplify tax obligations for the mining companies by removing corporate tax, among others.

“It’s clearly indicated in the 2015 budget that he wants government to amend the tax laws in order to change the current format of tax administration. If you analyse it properly, you can see that he is trying to make sure that the administration of tax is amended with a target on bending VAT Rule 18 in order to facilitate the payment of tax refunds to exporters, particularly the mining companies,” sources said.

The sources said Chikwanda has, however, projected a higher tax collection using the restructured mining tax regime by increasing the rate of mineral royalty from six per cent to eight per cent for underground mining operations and from six per cent to 20 per cent for open cast mining operations.

“He says he doesn’t want to overburden the mining companies with other taxes, including corporate tax. But again when you analyse this, you realise that the revenue gain from this will be less than half of the K3.6 billion [US$600 million] that he wants to pay the mines in VAT refunds,” the sources said.

And the sources said Chikwanda has proposed the sale of 27 per cent of government shares in ZCCM-IH in order to supplement funding for the 2015 budget.

“This may end up being another chaotic budget because he has already factored in the privatisation income from the mine into the 2015 budget expenditure estimates. So this is like selling government assets from the company but only for consumption,” sources said.

The sources said Chikwanda wants ZCCM-IH to conform to the Lusaka Stock Exchange requirement that prohibits single stakeholders from owning more than 75 per cent shares in a listed company.

Meanwhile, sources said Chikwanda has allocated about K117 million towards the rationalisation of the ZAWA operations.

“He has also provided for the creation of a new department under the Ministry of Tourism to take over the functions of ZAWA. This means ZAWA will cease to operate in its current form,” said the sources.

 
At 12:42 AM , Blogger MrK said...

Haabazoka urges Sata not to pay $600m VAT refunds
By Misheck Wangwe in Kitwe | Updated: 12 Oct,2014 ,13:24:46 |

PRESIDENT Michael Sata must put his foot down and refuse to refund the US$600 million VAT claims by mining companies and other exporters, says Dr Lubinda Haabazoka.

The Zambia Chamber of Mines last week said the failure to resolve VAT Rule 18 has a negative impact on cash flows and could seriously affect the operations of the mines.

But in an interview, Dr Haabazoka, a Copperbelt-based economist and senior lecturer of business studies at the Copperbelt University said paying VAT refunds without mining companies producing exporter documentation to justify such payments would be tantamount to corruption.

“We need to support President Sata’s earlier stance that we cannot export ‘soil’ out of this country. We need to refine all the mineral resources so that when minerals are going out of this country, we will put a reasonable price for the benefit of the nation because tax will be based on that value of a metal and not on speculation to say that its 30 per cent copper concentrate for example,” he said.

“President Sata and his administration must put their feet down and refuse to refund the mines if they fail to produce proper documentation to warrant VAT refunds.”

He said the government must refuse to pay the $600 million in VAT refunds if the mining companies fail to meet their obligation of providing documentation to justify refunds.

“What worries us is that the mines are operating on VAT refunds. The question is, what happened to their working capital? Where are the proceeds from the sale of that copper? Why is it that the mines are so much depending on VAT refund for their operations? Why are the refunds so high but the tax payments from the mines are low? All these questions must be answered by the mines,” Dr Haabazoka said.

“The law is very clear that where there is documentation, VAT refunds must be paid and when there is no documentation, the mines are not even supposed to come and ask for any refund from the government.”

Dr Haabazoka said VAT rule 18 in its current form would help enhance transparency in the mining industry.

But during a forum organised by the Zambia Chamber of Mines on VAT Rule 18 at Kitwe’s Moba Hotel on Wednesday, chamber president Jackson Sikamo said the government must look at the VAT rule urgently.

He said the VAT refunds must be made to all exporters so that the mines could continue to progress on the path of increasing mining and manufacturing production to sustain and continue to create jobs.

Sikamo said jobs for the miners through direct, indirect and induced employments would be greatly affected.

“The immediate impacts of cash flow constraints due to lack of refunds have been the suspension, cancellation and deferment of capital projects.

Production levels will be slowed down, payments to suppliers would be pushed back by 90 days or more and it will also lead to the reduction of corporate social responsibility programmes,” claimed Sikamo.

The Zambia Revenue Authority has also maintained that it would not make VAT refunds totalling $600 million to mining companies and other exporters.

 
At 3:08 AM , Blogger MrK said...

Chikwanda has failed - Nawakwi
By Abel Mboozi | Updated: 13 Oct,2014 ,10:21:50 | 1272 Views

EDITH Nawakwi says finance minister Alexander Chikwanda is a disaster, who has completely failed to run Zambia’s economic affairs competently.

Commenting on the K46.7 billion 2015 national budget Chikwanda unveiled last Friday, Nawakwi, who is FDD president, said the budget was nothing but a mere ‘shinga butter’ (smokescreen) to formalise theft and corruption in government.

“The Minister of Finance, who is a prefect, has admitted himself in broad daylight that these Chinese people are corrupting them, and if the Chinese are corrupting them as the minister is saying, the receivers are also corrupt. And who are the Chinese working with? They are working with the PF government and its ministers. So when you tell me about this budget, surely, in all honesty, I want to see a budget that revolutionalises agriculture from being a pick and axe to a mechanised and commercialised sector that creates jobs for my mother in Katete village so that, that mother can buy shares in Zanaco. I want a Zambian woman sitting in Muvulameno who can actually buy shares in the stock exchange like their Kenyan counterparts; that’s when you begin to talk. Otherwise, this budget is nothing but all ‘shinga butter’ meant for them to formalise theft and corruption,” she said.

“Isn’t it a foregone conclusion that those who have been supplying to the mines and profiting from what he [Chikwanda] has told us that the Chinese are extremely corrupt, and they have been corrupting them... So now, they want to clean up that money by buying ZCCM shares, so why does he say citizens? He should just say that those in the government want now to buy some shares in ZCCM. So abambo, they should just stop ‘shingaling (smearing) butter’ on our faces. So this budget is nothing but ‘shinga butter’. I personally like the honesty of my brother: he says the Chinese are extremely corrupt. When you look at the Anti-Corruption Act, for every giver, there is a receiver, and this is why we in FDD have said this government is not interested in projects that benefit the people. They are glued so much into construction because that’s where they have found loopholes to engage in corruption.”

Nawakwi said there was nothing to talk about in the 2015 national budget when the PF government had recorded the highest food prices, the highest transport costs and the worst education system.

“I challenge Mr Chikwanda, my elder brother, to go to maternity wing at UTH and see rats in the incubators for newborn babies. I challenge him to go there, come out and stand outside the maternity wing of UTH and tell me, my name is Edith Zowelani Nawakwi. And let him tell me that his government is working when he sees those rodents eating away our newborn babies,” Nawakwi said.

 
At 3:08 AM , Blogger MrK said...

Continued...




Nawakwi said Chikwanda had failed to run Zambia’s economy prudently.

“Our people have been stretched to the limit. We told them during the Structural Adjustment Programme, abena banja ati mangani mishipi, muzamvela bwino kusogolo. Ndiye vamene tenze kubauza (others say fasten your belts, the future will be better, that is what we were telling them). Late President Frederick Chiluba even pleaded so much with Zambians that ‘Let’s have this debt written off, please, please.’ Now the debt is written off and darling Chikwanda is now proudly saying ‘It’s at US$4.9 billion’ as if he went to beg for this debt relief anywhere. Late Cardinal, Merdado Mazombwe is no more, so who is going to champion the relief of this debt which Chikwanda and his friends are putting on our children? This Mr Chikwanda is a disaster; you cannot accumulate US$4.5 billion debt in three years, more than Dr Kenneth Kaunda accumulated in 27 years, and still stand up and say ‘This is not even by international standards’,” Nawakwi said.

“Which international standards is he [Chikwanda] talking about? If he is talking about the Americans, they are busy educating their children, President Barrack Obama has a presidential scholarship for the most brilliant children. Here in [Zambia] we have the Kambwilis who have gone to the university in the afternoon, taking a front role in the education sector. So which international standards is Chikwanda referring to? Which one? Is it between Nakonde, Mpika and Kasama? Is it the standard just here between Kafue and Mwanamainda, where people are slaughtering animals outside; is that the standard Chikwanda is talking about? Have you ever seen an international standard which denies brilliant children with six points scholarships? Is that the standard Chikwanda is talking about? No, I think let us be serious as Zambians, let us be serious.”

Nawakwi said that during the golden jubilee, Zambians were supposed to be blowing their trumpets and saying, ‘Yes, truly we achieved inheritance’.

“And if you read the book of Judges, jubilee means celebrate your inheritance. Jubilee means that you have arrived, you are rich and you are sharing wealth with your daughters and sons,” Nawakwi said.

She said as a party, the FDD believed that the fiscal policy must be used as a tool of national development by way of redistributing the national wealth.

“And the only wealth this country seems to have at the moment, in the absence of a vibrant agricultural sector, is the mining sector. And what we want as a country is to get a fair cut,” Nawakwi said.

“The mineral royalty tax increase Chikwanda has made is like paying rates for a house to the council; when you have bought a plot, you pay rates to the council. If you go to Arcades, check the amount of rates that Arcades is paying to the Lusaka City Council, and Manda Hill properties. You will find that maybe it’s just two per cent of the value of the property. What we want is to share in the profit. Now, it looks to me that my brother, ABC (Chikwanda), will not stop at anything; he will find any rule in the book to smear butter on our faces and pretend that we are eating from the same side of the bread. You see, that smearing is going as far as telling us that citizens are going to buy shares in ZCCM. I am just coming out of Eastern Province, I want the minister to tell me how my relatives at Muvulameno, Kanele, can afford to buy such shares.”

 
At 2:45 PM , Blogger MrK said...

Chikwanda a hypocrite - UPND
By Fridah Nkonde |
Updated: 14 Oct,2014 ,14:00:0

ALEXANDER Chikwanda is a hypocrite, says the UPND. And the UPND has described Chikwanda’s economic policies as “evil and murderous” to an ordinary Zambian.

Commenting on Chikwanda’s statement that Zambians are Trojan horses for foreign interests, UPND deputy spokesperson Cornelius Mweetwa said Chikwanda is a champion of political romanticism.

“Chikwanda wants to sound as though he means well. He doesn’t mean well to Zambians. Chikwanda’s economic policies are evil. His economic policies are harmful and murderous to an ordinary Zambian. It is therefore shocking to find that honourable Chikwanda is saying that Zambians are Trojan horses for foreign interests,” he said.

“If honourable Chikwanda understands ‘Trojan horses’ within the context of Greek mythology, he will understand that he is actually insulting Zambians by reminding them that they are Trojan horses at a time when he has been and he continues to be a Minister of Finance whose economic policies and budget are strangling the citizens of this country.”

Mweetwa said Chikwanda should have said that the civil servants were Trojan horses of the PF because of the budget that he recently presented.

He said the budget that Chikwanda presented represented a Trojan horse because the wage freeze was coming at a time when the cost of living had gone up.

“You maintain a wage freeze, after maintaining a wage freeze, you remove subsidies on fuel and maize…meaning that the cost of living for an ordinary Zambian has gone up. Then you implement murderous economic policies on foreign exchange regulations which have contributed to the depreciation of the kwacha to its lowest terms under the leadership of the PF so far,” Mweetwa said.

He said it was unfortunate that tuition fees at universities, cost of transport, food and cement had gone up.

“When the cost of constructing a house goes up, it means that even the rentals are going up. Therefore, the civil servants whose wages have been frozen are having to meet escalating costs of transportation to go for work, food and rentals,” he said.

Mweetwa said it was evident that civil servants were going for work unhappy, adding that there was no need for the government to expect much more output from them than what they are paid for.

“Before Chikwanda talks about Zambians being Trojan horses for foreign interests, can he also deal with the fact that he has created civil servants who are Trojan horses of his economic policies and budgeting style. Once he has normalised his economic policies, his budget, then we will believe him when he says that.You cannot begin to remove a small peck in another person’s eye when you are maintaining a huge log in your eye,” Mweetwa said.

He said Zambians expected a seasoned Minister of Finance like Chikwanda to be able to first look at the policies that were injuring people so that he could address them.

Mweetwa said the wage freeze had not only affected the people in employment but also their relatives.

In response to an observation raised by architect Dr Sylvester Mashamba at the ZICA post-budget discussion at Taj Pamodzi Hotel in Lusaka on Friday that the government needs to initiate stronger measures to tackle high levels of corruption, inefficiency, and abuse of office in the construction industry, Chikwanda said there was inadequate participation of Zambians in the local economy.

“One of the problems I want to tell you is that there is inadequate participation of Zambians in the economy. The Zambian economy will never be strong until you people can participate. We Zambians are just Trojan horses for foreign interests,” said Chikwanda. “There is not a single Zambian who owns a mine, but given our government system, we have not been very useful to that process...”

 

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