KCM underpaid PAYE for workers, audit reveals

Konkola Copper Mines
Konkola Copper Mines
A TAX audit has established that Konkola Copper Mines (KCM) underpaid pay as you earn (PAYE) tax for its workers to the Zambia Revenue Authority (ZRA) due to a payroll system error.

This covers the financial years 2006, 2007, 2010 and 2011.
According to an internal memorandum dated October 17, 2013 obtained by the Daily Mail, KCM vice-president for human capital management David Kaunda said the Vedanta Resources Plc-owned mining company will effect deductions from affected employees who were in employment during the period under review.
“Therefore, effective October 2013, KCM will effect deductions from affected employees who were in employment during the period under review,” Mr Kaunda said.
He added: “Individual letters will be given to employees advising the exact amount to be deducted and the period over which such deduction will be undertaken, taking into account that employees should not be too adversely affected.”
Mr Kaunda said according to the law, employers are required to register and operate a PAYE scheme under which they are required to deduct the appropriate tax from the emoluments of liable employees and remit the tax to ZRA.
Mr Kaunda said the employer, as an agent of Government, is under a legal obligation to deduct such tax and remit it to ZRA.
Earlier this year, KCM asked Government for time to pay back an overdue K136.8 million (US$25.8 million) debt it owes ZRA.
Daily Mail investigations established that the Vedanta-owned company had held “high-level” talks to discuss the unbundling of the debt, according to documentation in possession of the newspaper.
The US$25 million debt was first discovered after a standard routine ZRA probe which commenced in April.
“The ZRA carries out systematic announced probes in various companies, regardless of their ownership,” a source said.
“It appears it is at this stage that they [ZRA] discovered the debt which then stood at about K33 billion which has now risen after penalties.”
According to Daily Mail investigations, the mining company had asked Government to give it “time to pay”, citing high costs of  production in the industry even as copper prices remained buoyant.