ZAMBIAN GOVERNMENT IS CARRYING OUT A MINING SECTOR-WIDE TAX AUDIT TO ENSURE THAT THE COUNTRY IS COLLECTING THE FULL AMOUNT OF TAXES

MINISTER OF MINES MAXWELL MWALE SAYS THE GOVERNMENT IS CARRYING OUT A MINING SECTOR-WIDE TAX AUDIT TO ENSURE THAT THE COUNTRY IS COLLECTING THE FULL AMOUNT OF TAXES NECESSARY FOR SOCIAL PROGRAMS AND INFRASTRUCTURE DEVELOPMENT.

THE MINISTER OF MINES AND MINERAL DEVELOPMENT SAID THAT THE FINAL TAX AUDIT REPORTS ARE BEING CARRIED OUT AND CONSULTATIONS WITH COMPANIES WOULD BEGIN.

MR MWALE SAID TAXES ARE THE ONLY THING THAT ALLOWS THE GOVERNMENT TO CARRY OUT ITS SOCIAL REFORMS AND TO BUILD INFRASTRUCTURE.

HE SAID THE TAX AUDIT WAS INITIATED FOLLOWING THE 2008 FINANCIAL CRISIS WHICH SAW SOME COPPER PROJECTS SHUT.

ZAMBIA'S TAX AUDIT CAME INTO FOCUS THIS WEEK AFTER THE EUROPEAN INVESTMENT BANK SAID IT IS INVESTIGATING TAX EVASION ACCUSATIONS AGAINST COMMODITY TRADER GLENCORE INTERNATIONAL PLC IN ZAMBIA, WHERE IT IS THE MAJORITY OWNER OF MOPANI COPPER MINES PLC, AND HAS FROZEN FURTHER FUNDING TO THE GROUP.

THE EIB PROVIDED MOPANI WITH A $50 MILLION LOAN IN 2005 TO HELP FUND RENOVATION OF THE MUFULIRA COPPER SMELTER. THE LOAN IS DUE TO BE FULLY REPAID BY THE END OF 2016.

GLENCORE DENIES WRONGDOING.

MR MWALE SAID IT SOLICITED THE HELP OF OUTSIDE CONSULTANTS TO RUN THE TAX AUDIT.

IN APRIL A DRAFT REPORT ON GLENCORE BY GRANT THORNTON, DONE ON BEHALF OF THE GOVERNMENT, WAS LEAKED.

THE REPORT SAID GLENCORE OVER INFLATED COSTS AND UNDERVALUED ITS MINERALS, LEADING TO THE POSSIBILITY IT HADN'T PAID TAXES IN FULL.

BUT MR. MWALE SAID THAT WAS A PRELIMINARY REPORT AND FURTHER INVESTIGATIONS ARE BEING DONE AND GOVERNMENT IS WAITING FOR THE OUTCOME OF THE REPORT.

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