ZRA challenged to settle Mopani’s $110 million in VAT refunds
The Zambia Revenue Authority – ZRA has been accused of selective payments of tax refunds after it emerged that some foreign owned mines Value Added Tax – VAT refunds liabilities are being paid off regularly while that of locally and state-owned mines such as Mopani Copper Mines are not being given the same treatment.
The Zambian Business Times – ZBT has received information that ZRA owes Mopani Copper Mines about $110 million in VAT – refunds, but the rate at which ZRA is refunding the ZCCM IH majority owned mine is not as consistent when compared to foreign owned mines.
While Mopani is looking for the $300 million capital injection to revamp operations and make the mine profitable, the selective and slow payments of refunds from ZRA is not helping matters. Mopani new parent company ZCCM IH instead of floating shares on Lusaka Security Exchange – LuSE to raise the needed funds seem to favor the option of shading equity to some foreign investors and has engaged an advisor to endorse the decisions to sell stake to a foreign equity partner.
When contacted by the Zambian Business Times-ZBT, to give their position, ZRA Corporate Affairs Manager Oliver Nzala said the law under taxation does not allow the authority to give information to the third party or the public. Nzala explained that due to confidentiality issues the authority does not give out information on whether Mopani is Owing to ZRA or the other way round.
When told that this is a public interest matter and that there is a risk of Mopani ending up in foreign hands when it can raise the capital on LuSE locally, the ZRA corporate affairs manager insisted that “We are unable to respond to your query due to the confidentiality provisions embedded in the legislation ZRA administers which stipulates the limited situations which permit such information to be divulged.”
Both Mopani Copper Mines Management and Mines Minister Paul Kabuswe have confirmed that Mopani needs about $300 million capital injection to make the mine fully productive and enable the company to complete its expansion project in a bid to double production.
Mining and finance experts have argued that the $110 million owed in VAT refunds which other mines are being paid may help reduce the deficit from the $300 million needed to make the mine profitable. It seems that the local management has been starved of capital so that ZCCM IH justifies its intensions to offload the mine back into foreign hands.
Source: ZBT
