Audit reports on cheating mining companies not ready, ZRA

By Staff Reporter


THE Zambia Revenue Authority (ZRA) says it is still “in the waiting position” for some mining companies to respond to the Authority’s completed audits, five months after uncovering losses of close to US$8 billion through underpayments by First Quantum Minerals.


In March this year, Zambia Revenue Authority (ZRA) corporate communications manager Topsy Sikalinda, in a press statement, disclosed that the Authority had made a K76.5 billion (US$7.9 billion) assessment issued to First Quantum Minerals for misclassifying consumables and spare parts at importation for the last five years.


Sikalinda then stated that the ZRA was taking the case seriously and urged officers to pursue all available options for the Authority to recover all taxes on behalf of Zambians.


“ZRA has started the process of comprehensively auditing mining companies in all applicable tax types. Last year (2017), the amnesty on interest and penalties was announced to allow taxpayers to clean up their tax accounts. Those with issues were expected to engage ZRA and have a waiver on interest and penalties. A post amnesty review shows that only small and medium companies stepped forward and the Authority raised about K4.4 billion from the programme. Unfortunately, most large companies did not participate despite numerous reminders and extensions,” stated Sikalinda then.


“For this reason, we are announcing the preliminary assessment of K76.5 billion (USD7.7 billion) issued to a prominent mining company for misclassifying consumables and spare parts at importation for the last five years. The said items were declared as mining machinery (which attract customs duty at zero per cent) when in fact not. The applicable duty rate for the items ranges from 15 to 25 per cent.”


Asked this week on the progress that had been made on comprehensive audit of mining companies, Sikalinda said in an interview: “To the best of my knowledge, the audit is completed for the entire mining sector and all the big mines have been audited, in terms of customs audit. The affected mines had been written to and most of them had responded, there were just a few that had requested that we extend the period for them to prepare their written statements. Therefore, what ZRA did is to allow them to…. ZRA said, ‘it’s fine, we can give them more time to prepare their responses.’ If I’m not mistaken, they must have been given up to this month end. So, we are still in the waiting position until that process is completed”.