MORE than 170 employees at Sable Zinc Mine in Kabwe are set to lose their jobs following the placing of the company on care and maintenance due to the withholding of K64 million VAT refund by the Zambia Revenue Authority.
The company says 158 unionised employees and 12 management staff will be laid off next month to reduce the cost of running the institution.
This is in view of the enforcement by Zambia Revenue Authority (ZRA) of rule number 18 on value-added tax (VAT).
Mineworkers Union of Zambia (MUZ) general secretary Joseph Chewe confirmed the development in Kitwe yesterday.
Mr Chewe said the union was in receipt of correspondence for notice of redundancy at Sable Zinc involving 158 unionised employees.
He said Sable Zinc wrote to the union notifying it that the company was being placed under care and maintenance, hence the decision to downgrade its workforce.
Mr Chewe said there was need to urgently address the issue of ZRA VAT rule 18 so that job cuts in other mining companies could be avoided.
“We are aware some more mining companies are about to take the same route of laying off employees and, as MUZ, we are calling on the Government to quickly resolve the issue of VAT refund because the effect is going to be so severe,” Mr Chewe said.
A letter signed by Sable Zinc general manager David Littleford obtained by the Times indicates that the last day of working for the affected employees is November 17, 2014.
The notices are scheduled to be given to the employees 30 days prior to the last day of employment.
Mr Littleford said refundable VAT being withheld up to July 31, 2014 for Sable Zinc amounted to K64,905,765.
He said the amount was unsustainable for a small company like Sable Zinc as it had serious negative effects on cash flow, making it impossible to continue operations.
“Sable Zinc has been forced to place its operations under the Mineral Processing Licence 102158-HQ-MPL, on care and maintenance,” Mr Littleford said.
He was, however, confident that once the VAT rule 18 issue was resolved, Sable Zinc would resume normal operations.
He said the redundancy exercise would be carried out in accordance with the Employment Act.
Meanwhile Mines Deputy Minister Richard Musukwa has cautioned mining companies against using Vat refunds as an excuse to retrench workers.
According to the Zambia National Broadcasting Corporation evening main news monitored yesterday, Mr Musukwa said mining companies should not use the VAT refunds as an excuse to lay off workers and create anxiety among employees.
He said the matter was currently being resolved by the Zambia Revenue Authority.
Times of Zambia