We, members of Civil Society Organisations from Zambia gathered at the Alternative Mining Indaba observe with great concern the arm-twisting tactics by mining companies in Zambia aimed at pushing government to retract the recently introduced mineral royalties. We recognise the challenge that the Zambian government and other African countries have continued to face in the bid to collect revenue and maximise the benefits of mining due to aggressive tax planning by multinational companies coupled with a lack of transparency and accountability in the sector which has necessitated the change. The misreporting by mining companies on basic data such as the final destination for Zambian minerals makes it difficult for the country to realise benefits from its natural resources.
ActionAid Zambia welcomes President Edgar Lungu’s directive to ZRA to engage in dialogue with the mining companies over the VAT refunds and the new mining tax regime but notes that the dialogue on the tax measures needs to be led by the Ministry of Finance as the policy making organ in consultation with the Ministry of Mines and Zambia Revenue Authority.
In response to the European Ombudsman ruling that the European Investment Bank (EIB) should reconsider its refusal to grant access to the findings of their investigation into alleged tax dodging by mining company Glencore’s Mopani subsidiary, ActionAid Zambia Economic Justice Project Officer Nshindano Patrick Kryticous said:
Following the demise of President Michael Chilufya Sata on 28 October, we have followed with keen interest the political developments in our country and have been disappointed by the succession and leadership wrangles that have emerged in the ruling Patriotic Front (PF) and the opposition Movement for Multi-Party Democracy (MMD) respectively.
ActionAid is calling on Government to 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 justify the requirements under VAT rule No.18 regarding the conditions which should be met by exporters in order to qualify for VAT zero rating of exported goods.
ActionAid is demanding that Government discloses how it has addressed the allegations levelled against Mopani following the leaked Grant Thornton audit in February 2011 containing allegations on tax matters against Mopani Copper Mines and its parent company Glencore.
ActionAid Zambia tax campaigner Kryticous Nshindano said “The OECD’s tax experts have admitted that the G20’s reforms to tackle global tax avoidance will not meet the needs of the world’s poorest countries.
“Their plan to continue discussing the issues we face without us is just window dressing: their rich country club should not be making decisions about us without us. The world’s poorer countries must be included as equal partners in a truly global process to tackle tax avoidance.”
The community in Musele Chiefdom are urgently appealing to the government to provide an update on the status of the MOU, head lease and shareholders’ agreement with Canadian mining company First Quantum Minerals (FQM) in advance of their mining operations in Kalumbila, due to begin this month. Of particular concern is the fact that current proposed arrangements leave each affected family three hectares short of the agreed four hectares of land to be provided, an issue on which the government has remained silent.
Lusaka, Zambia, 14 July 2014: In reaction to the government’s announcement yesterday of the conclusion of an audit report into Konkola Copper Mines (KCM), ActionAid Zambia spokesperson Pamela Chisanga said:
Following Zambia’s issuance of its second international sovereign bond of USD$1 billion earlier this month, the Government must commit to close tax loopholes in order to mobilise much needed resources for essential public services, ActionAid said today.
Zambia’s High Court yesterday granted an injunction against the government’s overturning of an earlier decision to reject a Large Scale Mining Licence for Zambezi Resources’ copper project in the Lower Zambezi National Park.
The Zambian government spent just 6.4 per cent of its national budget on agriculture during 2009-2013, risking even greater food insecurity across the country, according to a new report published today by ActionAid, which recommends that one option to combat this problem is to effectively tax and collect optimal revenue from mining companies.