adminThe Chamber of Mines of Zambia has appealed to the Zambian government to refund withheld value-added tax (VAT) so that the mining industry could continue to contribute optimally to the country’s economy, reports Mining Weekly. “Our sincere appeal is that VAT’s rule 18 be looked at urgently and resolved,” said the chamber, which added that exporting mining companies had been meeting all the claim requirements, bar the stipulation of proof of arrival in receiving countries, for which it was impossible to obtain customs documentation, owing to the potential for commodities to change hands several times before reaching their final point of consumption.
The chamber has appealed for an urgent resolution to rule 18 and outlined how failure to pay withheld VAT refunds would force the cash-constrained industry to cut back on capital projects, lower production, make suppliers wait longer for their money, interrupt certain corporate social investment projects and diminish the collection of revenue by the Zambia Revenue Authority.
The withholding of $200m in tax refunds has resulted in Glencore-owned Mopani Copper Mines suspending some of its planned $800m Zambian copper mining projects, reports Business Day. In June the minister of mines said Africa’s second-largest copper producer was withholding a total of $600m in VAT refunds owed to mining firms and would repay the cash only when companies produced import certificates from destination countries.
“I would like to express my concern and distress that the continued withholding of our refunds to the tune of $200m may force us to slow down progress on these projects,” Mopani CEO Danny Callow said.
Callow said cuts to its 20,000 workforce were possible if it failed to meet growth targets. — Mining Weekly.
Moffat Mungazi
Online Reporter