First Quantum Mineral – FQM and the Zambia Revenue Authority – ZRA are tight leaped over the final settlement amount which was confirmed by FQM in their second half – Q2 financial reports availed availed to the Zambian Business Times – ZBT on July 24th, 2019.
FQM group President Clive Newall has stated that the miner had reached a settlement agreement with Zambia Revenue Authority – ZRA over the US$8 billion tax dispute. The statement only stated that the amount of the settlement was in line with FQMs earlier made provision but did not disclosed the actual final settlement amount.
And when ZBT reached out to obtain detailed information on the statement released by FQM, Its Public Relations Manager Godfrey M’siska told ZBT that the company is not in the position of availing further information aside what was stated in a note released by the parent company.
Speaking at the 93rd Agriculture and Commercial Show in Lusaka at the FQM’s stand, M’siska who was not amused with the question requested ZBT to rather refer the query to the the FQM London Office for more information as the company has already released a statement and that it will not avail any further information. He however bluntly stated that he would not give further information on the settlement.
FQM’s Kalumbila Trident Copper Mines was slapped with a K76.5 billion tax assessment by ZRA for import duties of $150 million and associated interests and penalties of about $8 billion in total. The assessment was in regard to the under and non-declaration of import duties on capital items, consumable and spare parts for use at the sentinel mine from January 2013 to December 2017.
Meanwhile, the Zambia Revenue Authority – ZRA has confirmed its agreement to settle the tax dispute of the over US$8 billion with the First Quantum Minerals – FQM Kalumbila but has also declined to disclose the final settlement amounts due to tax payer confidentiality restrictions.
ZRA Corporate Communications Manager Topsy Sikalinda told the ZBT in an interview that the Authority has resolved the matter with FQM Kalumbila after it appealed on penalties through the Ministry of Finance. He added that other mining firms that were audited have also been given assessments and they are at appeal stage, hence the tax authority is hopeful that it will conclude the process before the close of the fourth quarter of 2019.
The US$8 billion tax bill attracted public interest as the figure is huge and when one looks at the foreign currency denominated national debt which Zambia is grappling with, this tax assessment would have aided to defray the repayments and unleash a further infrastructure drive.
There has also been concerns by members of the public that the deal would be settled in a non-transparent manner, at variance with the collective interests of the majority of Zambian Citizens. It would be interesting to know just how much has been settled as this would either point to the fact that there is gross tax evasion by the mining houses or that ZRA was overzealous with its assessments
