PRESIDENT Edgar Lungu has warned mining houses that have a tendency of engaging in transfer-pricing schemes with their subsidiaries based in countries perceived as tax havens to stop the tendency or else, the relevant authorities will catch up with them
And President Lungu has said the participation of Zambians in the entire mining value chain is critical if the country is to maximize benefits from the sector.
President Lungu warned that relevant authorities would catch up mining houses that have a tendency of engaging in transfer-pricing schemes.
“This practice deprives the country of the much needed tax revenue. I am directing the tax authorities and other government agencies to ensure that this practice is curbed,” he said.
The President, who was in the company of former UPND Vice-President Richard Kapita and government officials, was speaking yesterday when he officially opened the Copperbelt Mining, Agricultural and Commercial Show (CMACS) in Kitwe.
He, however, said Government would seek to honour the old adage that it should not kill the goose that lays the Golden Egg.
“In the same spirit, my government will always seek a win-win situation between mining houses and the country,” he said.
President Lungu said Government was enhancing the necessary policies and regulations to promote the effective participation of Zambians in the mining supply value chain to create even more wealth.
“My Government is enhancing the necessary policies and regulations to promote the effective participation of Zambians in the mining supply value chain in order to create even more wealth.
“It is for this reason that I urge the mining sector to practically implement in full the participation of our people in the supply value. This must be done now and not later,” he said.
President Lungu also said his Government made a bold decision to revise the mining taxation regime to save the mines from closing down and render people jobless.
He said his Government would remain pragmatic in dealing with the mining sector and would not stand by and see mines close down and render people jobless on account of depressed commodity prices on the International market.
“My Government will remain pragmatic in dealing with the mining sector.
We will not stand by and see our mines close down and render our people jobless on account of depressed commodity prices on the international market.
“This is the more reason that my Government recently made a bold decision to revise the mining taxation regime which will come into effect in July 2015,” Mr Lungu said.
Earlier, Copperbelt Show Society chairman Bill Osborn said despite a few setbacks in recent times such as the depreciation of the Kwacha, the underlying strength of the economy was still present and hence the need to continue to build on it by maximizing development and increasing investment.
Mr Osborn, however, said at present, the investor confidence was at a low ebb and both the changes in the tax regime and the price of energy needed to be stabilized in order for investor confidence to be restored.
“We know that negotiations between the mining industry and government are on-going and am sure that both parties are keen to get these resolved as soon as possible and with your openness, I feel certain that the conclusion will be arrived at soon and to everyone’s satisfaction,” Mr Osborn said.