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Monday, 24 April 2017

Mining companies owed K1.5 bln in Value Added Tax …….’Mining companies should take advantage of the revised refunds’

Chanda---VAT refunds have been stepped up. Pix: Muvi TV


April 24 (Zambia Informer) ------- Mining companies are still owed a staggering K1.5 billion in Value Added Tax refunds as the Zambia Revenue Authorities (ZRA) makes strides to resolve the outstanding arrears, Kingsley Chanda, the Commissioner General for the Agency says.

Addressing Lusaka-based Journalists in Lusaka, Chanda stated that  about K3 billion has been paid to mining companies that are complying with the demands by the agency to provide receipts and relevant documents relating to their claims on goods and services rendered including export receipts on copper exported and were charged VAT.

“We have made tremendous progress to resolve the outstanding VAT from mining companies and so far we have paid out K1.6 billion and we are yet to resolve the outstanding K1.5 billion,” Chanda said in Lusaka, Monday. “The response has been very good from the mining companies,”

The ZRA urged mining companies seeking to secure their refunds to expedite their documentations as well as receipts adding that the agency has revised the refunds per months to K820 million from K700 million a month since June last year.

As at November last year, mining companies received a staggering K5.5 billion (US$495,000) in VAT refunds as part of the Government’s commitment to dismantle the outstanding US$600 million it owed the mining companies for various services.

The Zambia’s Government and the mining companies have had pitted differences since 2014 over the call to dismantle more than US$600 million owed to the multinationals in export receipts.

This delay led to some of the mining companies opting to close down their businesses as they did not have enough capital to invest in their projects.

Others were directed by their shareholders, including Mopani Copper Mines, of  Swiss-based Glencore International Plc to pursue the outstanding debt for onward investment in new projects before supplementary funds could be released by mine owners.

ZRA had earlier hinted it was only going to provide refunds based on verifiable receipts showing  the goods and services or exports or transactions where there is a legal requirement to ensure that all zero rated exports satisfy the requirements of VAT Rule 18.

“We have disbursed about K5.5 billion to mining companies in VAT based on verifiable receipts,”  Chanda had stated in an earlier interview.


Earlier, mining companies, through the lobby, the Zambia Chamber of Mines’ Chief Executive Officer, Talent Ngandwe had confirmed the commencement of the reimbursement to mining companies in VAT adding: “Yes we are aware of funds being given out to mining companies but we can’t quantify the actual amount paid to date.”

The row over VAT refunds has remained a heated matter with some of the mining companies closing down. Sable Zinc, the Kabwe based mining company closed its doors in 2015 after Government delayed to refund it over US$48 million.

Konkola Copper Mines had earlier been owed over US$260 million until after it secured about US$100 million in VAT. Mopani Copper Mines, owned by the Baal based miner is owed over US$200 million, First Quantum Minerals Limited owned Kalumbila and Kansanshi are estimated to be owed over US$300 million, with several others owed various amounts still awaiting to  have their debts owed in VAT resolved, a delay which had affected their capacity to sustain operations.

During a recent ZAMBIA Mining and Energy Conference (ZIMEC) indaba in Lusaka, Mopani Copper Mines chief executive Joan Jansen lamented the delays in refunds of VAT.

He had argued that the shareholders had insisted that the debt owed to the company in VAT be refunded first before other resources could be released for onward development of new projects in Zambia including the US$325 million syncronorium shafts in Kitwe expected to elongate of the mine lifeline to over 25 years.

However,  the mining companies had earlier faced challenges with regard to VAT refunds including extended period of filing in of VAT returns and the actual disbursement of refunds from 30 to 60 days, said chamber economist Shula Jalasi-Shula.

 The increased delay in receiving refunds presented cash flow problems for mining companies, a matter which was justified by former ZRA corporate affairs manager Mumbuna Kufekisa.

According to ZRA, reimbursements had been a problem  for most of the mines because of among other reasons, incorrect or non-availability of bank details had earlier caused delays in paying Value Added Tax (VAT) to mines,  citing the reason that  the revenue agency was paying VAT to mines through bank transfers and not using cheques as was the case in the past.

As a result of using bank transfers, any incorrect bank details may contribute to delays in paying out the refund.  The increase in delays was largely on account of the taxpayers not submitting the required documents for verification on time.


“Some taxpayers have Penalties and Interest which they may not be aware of and ZRA will refund net of any outstanding liabilities.  “However, we do endeavor to reconcile the Taxpayers account with the taxpayer to avoid misunderstandings,” Mumbuna Kufekisa had earlier stated.

Finance minister Felix Mutati had earlier hinted that Government was willing to spend 25 percent of the 2017 budget-estimated expenditure at US$6.5 million (K64.5 million) was planned to be spent  to dismantle arrears owed to various suppliers of goods and services to reduce the country’s debt burden.

Meanwhile, the ZRA says it plans to realize a staggering K8 billion in an amnesty extended to various business houses accrued on interest and penalties.

Launching the amnesty in which defaulters where allowed to resolve their outstanding arrears outrightly, over three or nine months until December this year, Chanda says while there were some administrative lapses during the process, all defaulters would be expected to resolve their indebtedness in the amnesty that runs from 24 April to 31 July this year.

During the period, according to Chanda, tax payers  will be expected to submit all outstanding tax returns and pay all their principal tax liabilities for tax periods prior to 1 March, 2017 and that all waivers of interest and penalties shall be on the basis of one submitting outstanding returns and full payment of principal tax liabilities.

However, taking cognissance that most companies could have defaulted on payments because of the difficult business environment that prevailed during last year, warned that the amnesty will not apply to cases under litigation, investigation, interest and penalties arising from an audit or investigation, interest and penalties relating to property transfer tax, among other such cases.

All those not falling under such jurisdictions needed to heed the advice and the amnesty extended like was  the  case with motor vehicles last year.

On reported smuggling by some unscrupulous business persons, ZRA said the agency has impounded seven trucks laden  with smuggled goods in the past two weeks and businesses in the habit of smuggling risked forfeiting their goods including the vehicles used in smuggling to the state under the revised regulations to curb the vice which Chanda said had become rampant.

NOTE: The current exchange rate stands at K9.46/US$1.

Friday, 21 April 2017

Zambia ‘embraces’ 588 asylum seekers from trouble-torn DR Congo ……….’as opposition leader Katumbi pleads with SADC leaders to compel Pres. Kabila to implement the country’s political agreement

Some of the asylum seekers that recently entered Zambia. Pix: Red Cross



April 21 (Zambia Informer)-----Over 570 asylum seekers, running away from the unabated civil strife in Democratic Republic of Congo have been in Zambia in the past two years, forcing leading opposition leaders and Presidential hopeful in next year’s election, Moise Katumbi to plead with leaders in the Southern African Development Community (SADC) to pacify over the brewing tension in Africa’s fifth largest and mineral rich country.

According to data, a total of  588 Congolese,  including minors have entered Zambia since 19 December last year in search of sanctuary. As at March this year, 107 asylum seekers have entered Zambia through various border points under the auspices of the Zambia’s Red Cross and United Nations High Commission for Refugees.

The continued influx of DR Congo nationals has prompted the Zambia’s national Society to monitor various points. It has placed over 200 officers at the northern transitory border posts of Chiengi, Kaputa, Nsumbu and Mpulungu to look out and welcome all would potential asylum and humanitarian seekers.

The escalating wars has since forced an estimated 588 Congolese nationals  to sojourn into Zambia since 19 December last year in search of humanitarian assistance as the  civil strife in various parts of DR Congo continues  as various interest groups including rebels seek to take control of the country and other economic interests-threatening economic growth in the 40 million populated Central African state and former Belgium colony.

In March alone, the national society in Zambia received 107 asylum seekers through Chiengi, Kaputa, Nsumbu and Mpulungu border posts.  Of the total, eight were unaccompanied minors, all who have since been screened, cleared and sent to various refugee centres including Maheba Camp in Solwezi in North Western Zambia sharing the border with Angola.

“This record brings to a total of 588 asylum seekers among  them 20 unaccompanied minors who have entered  since 19 December 2016 when the National Society began providing humanitarian assistance to asylum seekers entering Zambia from the Democratic Republic of the Congo, Bruce Mulenga, the national Society’s spokesperson in Zambia said in an interview. 

The majority of the asylum seekers are from  Moba, Goma, Uvira and Kalemie in the eastern part of the Democratic Republic of the Congo where civil strife among various warring factions has  escalated-prompting many of the nationals to seek solace in various neighbouring countries-Zambia included. 

The DR Congo nationals have been fleeing their country  because of the reported attacks on civilians by the rebel groups coupled with political disturbance caused by clashes among the rival groups in mineral rich country.

 However, Zambia, obliged to provide asylum as demanded  under the United Nations Convention of  1951,  has continued absorbing  people seeking asylum in the country from among other countries,  Rwanda, Burundu, Somalia and South Sudan..  To date, Zambia hosts over 53,000 refugees in various camps and settlements.

But,  despite the tethering civil strife in DR Congo,  the Zambia’s Red Crescent has remained alert and  has deployed about 200 Red Cross Volunteers in seven border entry points with the Democratic Republic of the Congo, ostensibly to render humanitarian assistance to in-coming refugees before they are finally taken to designated refugee camps.

The gesture to provide the needy with humanitarian assistance in being undertaken in collaboration with the Government and other various agencies among others, the United Nations High Commission for Refugees (UNHCR).

Exiled Congolese opposition leader,  Moïse Katumbi, is however, not happy with the developments in his country and has sought the intervention of  SADC leaders to compel President Joseph Kabila to implement the country’s political agreement.
According to Radio France International, Katumbi wants the civil strife to be halted immediately and ensure the instability does not threaten the economic growth of the country, endowed with among other minerals, copper, titanium, gold, diamond, among others, which have attracted various interest groups to fan the war and allow access to the natural resources.
Katumbi has seemingly taken up the role initially played by the late veteran opposition leader Étienne Tshisekedi who recently died in Belgium after an illness. Unless urgent measures were taken by SADC leaders to pacify, the country was headed for an economic ‘rundown’, Katumbi warns.
“It’s for them to put pressure for the agreement, not to have instability in the Congo because it’s going to bring instability in plenty [of] countries,” Katumbi is further cited by the France-based  radio, with reference to the International Conference on the Great Lakes Region (ICGLR) bloc which includes neighbouring countries such as Angola, Rwanda and Uganda.
Katumbi has been in exile since May last year when he was sentenced in absentia to 36 months in prison for illegally selling a property in Lubumbashi. The Congolese authorities also issued an arrest warrant for him on separate charges of hiring mercenaries, which he argues will not detach him from his country of origin.
“My place is not in Europe, my place is in my country in the Congo,” Katumbi added. “I want these issues first to get resolved because there are bogus charges against me, fake charges,”
Tshisekedi, 84, passed away in Belgium at the start of February. However, the repatriation of his body to his home country was delayed because of among other reasons, arguments over his burial site.
The veteran opposition leader had led his Union for Democracy and Social Progress (UDPS) since 1980 making it the first organised opposition platform in that country.
Tshisekedi’s son Felix has been touted to take over the reigns of his father who led the Rassemblement, an opposition coalition which includes the UDPS.  Felix Tshisekedi is also expected to become prime minister in place of his father as had been previously agreed in a deal between the government and opposition.
Katumbi, who is also a member of the Rassemblement, said he considers Felix “a friend”, somebody who’s “got potential and he’s going really to defend the people of Congo”.  
However,  the political agreement between the government and opposition, which is intended to bring about delayed elections, has still not been implemented. Katumbi wants to see the opposition impose a deadline.
Kabila’s mandate ended in December 2016. The political agreement is supposed to pave the way for a transitional government headed by Kabila with elections later  this year.

Thursday, 20 April 2017

Zambia walks ‘head high’ on US$1 bln IMF cash bail out despite political euphoria ……….’Investor confidence not waned despite political developments

Chanda---well, if the IMF deal fails, we'll walk away and look elsewhere'


April 19 (Zambia Informer)------Zambia, Africa’s second leading producer of the red Metal-copper, remains optimistic of clinching over US$1 billion in aid package during the ongoing World Bank/IMF Spring meetings in Washington DC.

Meanwhile, despite the political developments in the country that has seen a 'side-swing' in the country’s politics and threatens the country's serenity spurred by the detention of opposition leader, Hakainde Hichilema for alleged treason, Zambia’s reputation as a beacon of peace and Africa's favorite investment destination, remains high despite the 'dissenting behavior by some people in the country' bent on distabilising the harmony enjoyed by the people.

“We are optimistic that we will secure the aid deal from the International Monetary Fund  during the ongoing Spring Meetings of the World Bank and the IMF……we don’t expected to get less than US$1.2 billion because we envisage to redress many concerns affecting various sectors,” Amos Chanda, the spokesperson for the Presidency in Zambia said in an interview Tuesday.

“We, if the deal fells through, then it will not be because of the ongoing problems in the country because the Government is committed to ensure there is peace and order while at the same time protecting property and lives of its citizens,”

In recent weeks, Zambia has experienced unprecedented wave of disturbances including some infrastructure being burnt by unknown people especially in the aftermath of the arrest of leading opposition leader Hichilemba early April in Mongu in western Zambia. The arrest culminated in Hichilema, 55, being charged with  alleged treason, a matter currently under determination by the courts of law.

Some foreign diplomats accredited to Zambia and various voices have been raised over the detention of  Hichilema, with some describing the development an erosion of democracy and likening the country to its neighbor Zimbabwe. 

President Lungu has,  however, warned diplomats not to indulge themselves of national nature but to observe etiquette and respect the sovereignty of the country as they declared during the presentation of their credentials when they were posted to Zambia.

Some renowned statesmen including for Nigerian leader Olusaguni Obasanjo, former Kenya’s prime minister Laila Odinga, the European Union, United States and other interest groups have raised their voices over Hichilema’s detention. 

They are seeking his unconditional release, to which President Lungu, 60, says was unable to act or exercise pardon or prerogative of mercy until someone is proven guilty and is eventually convicted can he then act.

However, Chanda says Zambia’s case with the IMF’s financial bailout was well prepared and the delegation in Washington, led by Finance minister Felix Mutati, were well aware of the urgent needs for Zambia to redress all financial concerns and realign the economy.

This, according to Chanda, making the team obliged to ensure all efforts are put in to secure the financial bailout from the IMF-nothing less than US$1 billion as the programme was home ground and devoid of conditionalities.

“Our case is water tight and we are sure we’ll break through the ice……if there any concerns that might affect the financing deal……we’ll accept the outcome and move on, but, as far as we are concerned, this issue is different from politics, so we remain hopeful of securing not less than US$1.3 billion or more because the terms are favourable and we are basing our hope on the home growth programme dubbed Zambia Plus”.

On whether the investor confidence has been threatened following a spate of political differences that have engulfed the country in the aftermath of the arrest of the opposition leader, Hichilema, Chanda was categorical adding that the existing and potential investors understand what is happening and that all the happening has nothing to do with the violation of the rule of law.

“We don’t  have a problem with the investors…..the confidence about Zambia being a favoured destination is still very good and we have so many  of them (investors) that are queuing to venture in various projects either as joint ventures or single entities.

Chanda is optimistic that with the envisioned success of the aid package, the finalization and final receipt of the assistance could probably be done in Lusaka by the end of this month or early May.

Chanda, however  notes that the detention of Hichilema was the decision of the police and had no interference from the state, who in their professional judgment,  acted in the manner they did. All developments surrounding or arising from the matter would not impact on the negotiations with the Breton Woods institution unless otherwise, if if did Zambia will look elsewhere for the sake of its reputation.

 “In an event that it became an issue, we will not lose sleep over it.......We will walk away, look at other options of refinancing our programmes and say, well.........the sovereignty of the country demands that we enforce law and order.”

Earlier reports citing finance minister Mutati say Zambia plans to reach an aid deal for as much as $1.6 billion with the IMF by the end of April, Bloomberg News  reports.

 “At the moment we know that we can get up to $1.6 billion -- if you ask me, I’d go for the maximum,” Mutati told Bloomberg News.  “Hopefully,  the program can be presented to the board sometime end of June, beginning of July.”

The country has been talking about getting IMF aid since 2014, but resisted after two presidential elections since then made the required reforms politically unattractive. The country’s fiscal deficit has risen, foreign-exchange reserves have declined, and economic growth is near the lowest since 1998, spurring the need for a program with the fund.

Zambia’s debt has also been climbing, putting pressure on the Treasury. External debt has increased to $6.9 billion, said Mutati, who President Edgar Lungu appointed finance minister in September. That’s more than double the level in 2012. Total government debt is about $10 billion, which is “pretty high,” Bloomberg further cites Mutati as saying.

The last election took place in October, with Hichilema, the leader of the main opposition party, refusing to recognize the result. He was charged with treason  recently for failing to move off the road for Lungu’s motorcade. 

Hichilema was last arrested in October over allegations of unlawful assembly and says he’s been detained at least 16 times in the past five years, Bloomberg news adds. 

The matter is still under determination by the Zambian court with Hichilema remaining in custody until Wednesday 26. It is pending a ruling by the presiding Magistrate over the charges laid against him including that of alleged treason.