Zambian mines crippled by $500 million tax dispute

Zambia is hobbling the country’s mining industry by withholding more than $500 million in tax repayments, says the Chamber of Mines.

Zambia is hobbling the country’s mining industry by withholding more than $500 million in tax repayments from companies including Glencore Xstrata Plc and Vedanta Resources Plc, according to the Chamber of Mines.

The Zambia Revenue Authority last year stopped tax repayments to mines that don’t comply with a rule requiring them to provide an import receipt from the country of final destination of their commodities. Mines often don’t have access to such documents as they sell their products to traders and don’t know where the copper ends up, said Emmanuel Mutati, president of the industry body.

“They’re still withholding the repayments,” he said today in a phone interview from Kitwe in the country’s copperbelt. “It’s crippling the industry now.”

Mumbuna Kufekisa, a spokesman for the Zambia Revenue Authority in the capital, Lusaka, declined to comment.