MMD’s Statement on KCM taxation Debacle

Chairman Of Vedanta Resources-anil Agarwal
Chairman Of Vedanta Resources-anil Agarwal

The Buck stops with the PF Government

The PF government is currently firmly in its third year of governance and should therefore begin to take full responsibility for every aspect of the Governance structure of our country. Passing the buck or blaming other actors for their lack of competency is not going to resolve the numerous problems facing this country. They were voted into office with a clear understanding by the voters that they would fix our problems, correct the mistakes made by the MMD government and improve the working conditions and general standard of leaving for our people. At this point in their governance, they can no longer continue to give excuses and to externalize problems, most of which are as a result of their own making.

The above advice holds true in specific reference to the KCM debacle. I wish to remind the PF government that they had promised the people of Zambia an immediate up scaling of revenue from the mining sector. This was to be done through the introduction of a Windfall Tax. They also undertook to introduce a more effective and efficient tax regime, overall, that would guarantee more money in people’s pockets. More money through an effective tax regime and the creation of 5 million jobs were their core promises to the people of Zambia. They also undertook to change the structure of the mining sector, particularly to bring about a positive relationship between Mine owners and wage earners; a relationship which would tilt towards greater advantage for the working class. Contract employees were also promised better conditions of engagement, through government intervention, by the large mining houses.

None of the above has happened in the three years that President Michael Sata and the PF government have been in Office. MMD therefore is of the view that PF’s lack of capacity to collect appropriate taxes remains a PF scandal. It is for this reason that great lamentations have been expressed by the ordinary mining worker.

The MMD does not condone and strongly condemns the reported comments by the KCM CEO Mr. Anil Argawal. The alleged revelations of the company cheating the Zambian Government are very sad. However, this only serves to expose the incompetence of the PF government. Although the MMD is a firm believer in healthy relations between government and investors, we believe that the dignity of our people should not be ridiculed by any person locally or abroad.

While the statement of Mr Anil Argawal is atrocious and its consequences are deplorable, the onus is on government to ensure that no individual or group of individuals, corporate or otherwise manipulate our existing tax laws. If all we do is to cry foul, then we have failed as a nation to implement our own laws and regulations. It is the Zambian government that must ensure that we are receiving equitable taxes from all companies operating in Zambia.

It is the PF government’s responsibility to ensure that all business houses abide by all labour and taxation laws. They can not be allowed to give any more excuses three years down the line. When this matter first came up, some time in February 2014, The Vice President of the Republic, in fact made an attempt to defend the company and indicated that the situation was so bad at KCM that they did not want to instigate a receivership by putting undo pressure on the firm.

Given what has now transpired, The MMD demands that verification of these revelations be done by relevant government agents and if confirmed to be true, severe penalties must be applied. While government pursues this case, our submission is that extreme caution is taken so as not to bring discomfort to well meaning and law abiding investors in the entire Zambian economy. We must continue to create a conducive investment atmosphere in the nation while taking to task those who abrogate our laws. We also join those who are asking for a Forensic Audit to be done through out the entire mining sector in order for government to develop a platform for a fair and equitable Mine Tax Regime. It is our hope that the mining sector will in the future contribute its fair share to government revenue while giving it enough room to breathe so that it is able to reinvest, expand and employ more of our youth in Zambia.