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Zambia Refusing to Release $600 Million in VAT Refunds to Mining Companies

Looks like mining companies such as First Quantum Minerals, Vedanta, Barrick Gold and Glencore Xstrata will have to wait a little longer to get hundreds of millions of dollars VAT tax refunded to them.

According a report from Reuters on the sidelines of Zambia’s International Mining and Energy Conference (ZIMEC) in Lusaka this week, Mining Minister Christopher Yaluma said that the government would withhold some $600 million in VAT refunds until the mining companies could produce import certificates from destination countries.

“That money is owed and we will have to pay as long as they fulfil the requirement. It was slightly above $600 million as at the end of May,” Yaluma told reporters on the sidelines of a mining conference in the southern African nation’s capital.

The government in Africa’s second biggest copper producer last year started enforcing a 2008 requirement that exporters provide it with foreign country import certificates for copper shipments in order to curb tax avoidance.

However, the companies complained that they were often unable to do so because they sold via middle-men.

Yaluma said they had started producing the correct documentation after meeting Ministry of Finance officials three weeks ago.


Source: Reuters

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