More companies exposed in tax avoidance scandal in Zambia

The Zambia Sugar Company tax scandal that was exposed by Action Aid is a tip of an ice that is wrecking havoc in the country.

Sources in the Ministry of Finance have reported that only two mines paid taxes in 2012 amounting to K2.5 trillion.

Kansanshi Mines Plc paid K2.3 trillion and Chambeshi Mines paid K200 billion.  These are the only mines that have been paying taxes since 2007.

The rest of the mines declared losses and have never declared tax profits from the time they started operating with the help of government and Zambia Revenue Authority (ZRA) officials on their payroll.

Ironically the mines that have been declaring losses have continued receiving refunds on taxes they pay when they import goods, buy electricity and other goods locally.

Konkola Copper Mines received tax refunds amounting to K1.9 trillion, Mopani K0.6 billion and Lumwana K0.7 billion.

Be on the look for a detailed Watchdog scandal on how Mopani Copper Mines and the parent company Glencore have been evading tax in Zambia while the owners have become multi-billionaires in Switzerland.

Best way to honor Chibombo victims
Sibeta, MP who moved motion to impeach Mwanawasa is dead

77 Responses to "More companies exposed in tax avoidance scandal in Zambia"

  1. Sachi   February 12, 2013 at 05:55

    And nothing will happen. It seems that all readers and contributors are forgetful of the past disclosures (Varun; SAB Miller; Zantel…). Within days, dust will settle and plunderers will reach “modus-vivendi” with rulers until next “revelation”.

  2. Nampundu   February 11, 2013 at 23:54

    Its nice that zambians cry foul when foreigners are at receivig end. ZAMBIANS are the worst BUSINESS tax evaders and dont want to pay tax but want services delivered. Start your own business ba mwankole so that yo feel what it means to invest and make losses. DontNo one like to make losses if you are real businessman. Shout you beaks when you know nohing about investment and paying taxes. This country can develop if half of the tutembas paid even k1000 per week as tax! I pity most workers who pay paye the bulk of the country’s revenue!

  3. ehtel kangowa   February 11, 2013 at 23:54

    it is good to have people like this who can open our eyes, our friends are making it from the same tax and they dont experience poverty. look at the money involved, enough to finance our national budget but why do we face deficits? politicians owe alot from us. they are the ones bringing all misery.

  4. PRAISE GOD   February 11, 2013 at 23:09


  5. Peter   February 11, 2013 at 21:22

    Can Action Aid provide this Report giving us the details of financial statements showing evidence of these very serious allegations with notes on the alleged Tax evasions for every firm they allege evaded Tax.

    It is not professional to just get conclusions from ActionAid and assume that their are allegations are true just because they are from developed Countries. This is intellectual laziness. Its not wise to go emotional over allegations just because they are from ActionAid. Can Action Aid avail us the reports. Give us a link to follow their Report. Otherwise it may just be hot air seeking cheap publicity.

    • Miodon   February 11, 2013 at 22:04

      Read the article in the Guardian. It has a link directly to the original Action Aid report!

  6. bosco   February 11, 2013 at 20:59

    Money laundering, tax evasion is all pervasive. Banks are engaging foreigners and remitting millions of dollars as management fees (check Barclays Bank and Standard Chartered Bank accounts and one will find millions of dollars remitted over the last 20 years) and insurance companies are transferring millions of dollars to their holding companies overseas disguised as reinsurance premiums (check Hollard Insurance and Africa Life that are reinsuring with their holding companies.

  7. mbewe jonathan   February 11, 2013 at 19:46

    if DR CONGO can have investors where there is no peace;HOW about zambia/ zambians lets not be beggars for the so called investors,educated people help zambia from these western thugs stealing our natural resoures/evading taxes

  8. Mubanga   February 11, 2013 at 19:38

    It is similar issues of tax evasion that led to some nations to to crumble down! Zambia is finished! I wonder what our government is doing. This whole thing increased especially when RB came to power. He gave too much freedom to these thieving companies. PF is even worse and I know they wont do anything! What a country!!

    • seer   February 11, 2013 at 20:54

      the hate for RB will kill you!!!!!!:

  9. Wanu Ngwee   February 11, 2013 at 19:17

    Zambia is not poor, it’s our own Goverment that makes it so! Zambian mines export about 1.2million tonnes of copper every year. Given that copper prices are now around $8,500 per tonne, this translates into exports of about $10.2billion annually. The maximum cost of producing a tonne of copper from mining, processing and transportation from pit to port is well under $3,500 per tonne, meaning that the maximum annual total mining cost for this resource is about $4.2billion guaranteeing these mining exploitative companies a whooping $6billion in profits ANNUALLY. So at a conservative taxation rate of say 35%, ZRA is supposed to be collecting not less than $2.1billion ANNUALLY into our fiscus! Am talking about money that can build us 2,842km (i.e. a dual carriage way from Livingstone to Nakonde) of highway road every year (South African quality & standard), or 15 hospitals the size of Ndola Central hospital EVERY YEAR! or 4 universities of the size of UNZA every year!!! WHO IS ALLOWING THIS THEFT TO HAPPEN??

    • Miodon   February 11, 2013 at 22:06

      The useless Pathetic Fools we now have, who are supposed to be governing the country by working a three day week on full pay!

    • cynic   February 12, 2013 at 05:38

      If what you say is true, this is more than enough for Chirwa’s experiments bane!

  10. obama   February 11, 2013 at 18:00

    This is exactly why islam is against these western schemes! Guys please wake up and see how the zionist schemes are designed to make the very few individuals richer at the expense of poor africans. Why do you think that the system was created in such a way to make to dollar the pre dominant currency? It was done to enable them control the world! The governments of America, british, israel amongst other are the biggest culprits and the moment you fight them, you are demonised! However Mugabe may be, love him for his stance against the west. We were physically colonised and turned into slave and are still under modern day slavery!! I say reduce tax for Zambians and increase tax for these burgers

  11. Kabalwe   February 11, 2013 at 17:24

    Pipo pliz watch this film on YouTube regarding
    Tax avoidance and pipo exploitation by mopani
    Copper mines. You’ ll feel like punching somebody
    In the face. Soooooo sad!!! Indeed cry the beloved country
    Zambia. God watch over us!! Zambia Good copper Bad copper

    • Mubanga   February 11, 2013 at 19:39

      Thanks for this sharing. Zambia is being swindled of huge sums of moneys!

  12. One Zambia One Nation   February 11, 2013 at 16:36

    Very sad state of affairs indeed. Its so painful to watch millions of Zambians suffering when the ‘foreigner’ is enjoying. Its not that we don’t love them, its what they do that we don’t like. Take for example, Zambian Bottlers, the engage a South African company as a merchandiser, this company employs hundreds of Zambian youths to work as merchandisers and they place them around in the communities where they have containers of soft drinks. When it is time to sign the employment contracts (and they only give them 3 months, 6 months contracts – clearly against the Labour Laws of Zambia)and yet they have been using these same people over a period of 4 years. The recently gave them new contracts (period not specified and the salary – actually the page which is supposed to have these details was removed) and only to be inserted after they all signed? Is this normal? I wonder whether Sub Miller the parent company knows what goes on as it enjoys huge profits from its drinks sells.

  13. mamamama   February 11, 2013 at 16:31

    I want to know what action is being taken about Zambia sugar and the mines. We get the reports but what is being done? Or are we going to complain about it and forget tomorrow? Zambians have the potential to be so rich but we just watch while others benefit from our sweat.

  14. djms   February 11, 2013 at 14:21

    Only if we can accept to start from square one then things can change. People from Z(CB) can not sacrifise their peanut salaries for alternative employment. Only sacrifice can change things. “Mugabe behaviour.” If all african leaders can behave like him we can easily develop. Mind you our forefathers sold our brothers/sisters as slaves. You take these guys to court you will be shocked to find that politicians and a few rich guys are involved. As long as we don’t speak our mind against them. We the poor, we will continue suffering. So many countries survive without mines. Lets stop this nosense as early as pocible. Whether global crunch or what let us stand on our own. The more we borrow the more they will control us. Frusted man.

  15. Katendi Nkombo   February 11, 2013 at 14:02

    Iwe chi Ukwa, work up,foolish man! You are depriving us Zambians of our rights.U will see when UPND comes to power with my husband as vice president! I.D.I.O.T!

    • GK   February 11, 2013 at 15:34

      That’ll never happen at that rate.

  16. Anne Cheelo   February 11, 2013 at 13:58

    It is not only the mining companies or Zambia Sugar who are evading paying taxes to the Govmt.

    Even companies especially pharmaceutical companies do that by not showing a full a salary of an employee and only show a small amount and the rest is paid on cash not avoid pay as you earn. So many companies are doing this the expense of developing our country.

    Govnt do your home and you will see what I mean.

  17. cybernet   February 11, 2013 at 13:36

    It is smazing how a company like Zambia Sugar keeps afloat. Consider the following:
    HR steals by creating fake cases for the company and payments to lawyers are shared, Engineers connive with contractors to inflate prices and proceeds are shared, Finance they take what they want and afterwards cook the books, marketing simply get the sugar at export prices which are low and resell in Zed at fabulous mark-ups and the owners ABF are evading taxes! Expatriates recomend companies from SA and when they go on ‘holiday’ collect VAT.

  18. Rosco   February 11, 2013 at 13:12

    Zambia,Africa’s largest copper producer lost an estimated income of USD 175million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.

    United Kingdom based Non Governmental Organisation, Action Aid said in its pilot audit by Grant Thornton, Zambia and Econ Poyry, a Nordic basedglobal consulting and engineering company which revealed glaringirregularities in production and revenue figures that Mopani CopperMines submit to Zambia Revenue Authority for tax administration, mostwhich hinge on its links to Glencore AG international.”

    “Zambia continues to lose ondividends from Mopani Copper Mines as the Glencore owned mine neverdeclare any dividends to Zambia Consolidated Copper Mines InvestmentHoldings. During the period under review, Action Aid estimates that the Zambians government lost an estimated USD 50 million per year in undeclared dividends to ZCCM IH by Mopani.Mopani Copper Mines, according to Action Aid was avoiding declaring anydividends by ZCCM IH through transfer pricing and over statement of thecosts.

  19. Mwana Mfumu   February 11, 2013 at 13:08

    An what is the PG Government doing about it?

  20. Rosco   February 11, 2013 at 13:08

    the worst looter is Mopani ! $500 million lost between 2003 and 2008
    chiluba’s era was a scam, banda’s regime was a electoral scam,

    now where is the change ???
    Sampa and Chikwanda, what are you doing ???

    • Habulembe John   February 11, 2013 at 16:35

      Chiluba was president in 1991-2001. Yr period mentioned how does he come in.

      • Rosco   February 12, 2013 at 02:20

        It is well-known that chiluba was rotten to the core.

        He is accountable because he had sold ZCCM assets eg Mopani for a song during the privatisation
        corrupton… bribes…

  21. Rosco   February 11, 2013 at 13:06

    the worst looter is Mopani ! $500 million lost between 2003 and 2008 chibula’s era was a scam, banda’s regime was a electoral scam,

    now where is the change ??? Sampa and Chikwanda, what are you doing ???


    Zambia,Africa’s largest copper producer lost an estimated income of USD 175million in tax revenue between 2003 and 2008 from tax avoidance practices’ by Glencore AG International owned Mopani Copper Mines.

    United Kingdom based Non Governmental Organisation, Action Aid said in its pilot audit by Grant Thornton, Zambia and Econ Poyry, a Nordic basedglobal consulting and engineering company which revealed glaringirregularities in production and revenue figures that Mopani CopperMines submit to Zambia Revenue Authority for tax administration, mostwhich hinge on its links to Glencore AG international.”

    “Zambia continues to lose ondividends from Mopani Copper Mines as the Glencore owned mine neverdeclare any dividends to Zambia Consolidated Copper Mines InvestmentHoldings. During the period under review, Action Aid estimates that the Zambians government lost an estimated USD 50 million per year in undeclared dividends to ZCCM IH by Mopani.Mopani Copper Mines, according to Action Aid was avoiding declaring anydividends by ZCCM IH through transfer pricing and over statement of thecosts.

    • most daring   February 11, 2013 at 15:11

      A bunch of unlearned baboons. Forsaken idiots

  22. sanity   February 11, 2013 at 13:04

    register London judgment when most of Zambian money lies in British banks…hipocrisy…

  23. sanity   February 11, 2013 at 13:02

    alliance one and all tobacco companies in eastern province use transfer pricing to avoid paying import taxes for the Malawian tobacco smuggled into Zambia and this tobacco is paid for on USdollars to is then reexported for processing to Malawi.they then bill Zambia processing fees which cancel the ‘export revenue ‘

  24. Man -Abel   February 11, 2013 at 12:39


  25. Harry Mafuyeya   February 11, 2013 at 12:37

    Corporate reporting packs for multinationals include transfer pricing and related party dealings. This basically is to ensure that their Revenue Authorities keep a tag on these tax cheatings. ZICA should compel companies in Zambia as well to include transfer pricing and related party dealing disclosure in a more detailed manner so ZRA can spot these from Financial Statements.
    Another suggetion is that the Auditor-General should be compelled by law to Audit these high risk revenue evader. This will ensure that their Multinational audit firms that check their books do not declare wrong opinions.

  26. Harry Mafuyeya   February 11, 2013 at 12:28

    Strange! Where is my post?

    • most daring   February 11, 2013 at 15:13

      Where is the post the paper that dis bulshit

  27. rodrick   February 11, 2013 at 12:25

    Its indeed sadening to learn that multi national firms are operating in unlawfully in our country.If i can recall well in 1991 the MMD under the late FTJ introduced the privatisation of our parastatal firms by the guidance of IMF and world bank they preached about the benefits of the it and ignorantly the implemented the policy which resulted in tranfering of companies ownership to foreign firms.the consiqueceses were job loses in most sectors of our society.Today we still suffer to same problems.The same brettonwood instutitions did not empower gvt to prevent such activities,now look the way we are robbed in daylight theft.Action Aid please be vigilated and expose all illegal dealing expecially those who are facilitating and aiding such pretty sure that they are some of gvt officials who are abetting such illegal activities.therefore the ACC DEC and ZRA should procecute those found wanting regardless their economical status

  28. Harry Mafuyeya   February 11, 2013 at 12:24

    Issues of tax avoidance are really dicy. Our tax laws and their administration leave much to be desired. For UK & US subsidiary companies in other countries when reporting they make sure their pack includes desclosure on transfer pricing and related party activities. This ensures the Revenue Authority keeps a tag on dealings not at arms length. ZICA should compel companies in Zambia to produce as much information as possible on transfer pricing and related party dealings.
    Another suggestion is the Auditor-General should compel these high risk government revenue companies to submit their Financial records before it despite audited by their realted multinational auditors. This will ensure strict compliance as regards proper tax revenue to government treasury.

  29. John Chinena   February 11, 2013 at 12:02

    Its plain simple: let us ask PF to come up policy statement on this corporate tax evasion issue ASAP and the way forward. Can some MPs take this to ask the VEEP in parliament? Infact i’m being evasive; Can President Michael Sata justify why i voted for him because among other reasons, he made me believe that he will do something drastic about such things – as man of action!! I need answers from my head of state whom i voted for; not his “”voicemail”” please!! Even opposition parties, they should start taking a clear, black & white stance (documented) on these issues so that we hold them to account. it is not enough to just make pronouncements at rallies..!! Bakateka, do something, coz my blood is boiling. Otherwise we may just join Jerabos to get our 0.1 percent share….

  30. chantete   February 11, 2013 at 11:59

    Surely the government should put the mechanism to monitor the mines on sales and expenses to arrive at profit

  31. Zambian Soul   February 11, 2013 at 11:58

    Please sign the petition by Action Aid. We tend to spend time talking, lets start making these multi-national criminals pay. How many children go hungry in Zambia, die because they can not be treated of petty illness, can not be educated and these guys are stealing millions of dollars. Z-watch dog, please publish the link.

    • John Chinena   February 11, 2013 at 12:10

      Where is the petition? What are the threshold numbers for action? What are the deliverables once you get the right numbers?

  32. kwesu   February 11, 2013 at 11:46

    Good news expose them we need that information……

  33. charlie diaspora   February 11, 2013 at 11:35

    Just sue the Zambia Sugar in the UK, Glencore and the Chinese NFM etc in Zambia….oh, shit, who would slate our case – Nchito? Oh nooooo, damn! May be thousands of signatures and then whole-page adverts in WSJ, FT London and in big dailies in France, Canada, Switzerland…Okay sue their top management within Zambia and sentence them ! Absolutely disgusting, MCS knew all along that the people knew this and they voted him in now he’s backing down !

  34. The Kimbanguist   February 11, 2013 at 11:30

    What was the reaction when GRZ took over Zambia Railways? Privatization does not always work and this the time GRZ should show some leadership. These investors will leave you with huge holes in the ground after they steal all the resources. Of what benefit is privatization when they are not paying taxes.

  35. Wanzelu   February 11, 2013 at 11:23

    ZICA should inspect the books of these companies. One of the reasons why these companies are declaring losses is because they are hiring too many foreigners who they pay huge salaries. On their books these expats are employed by the head quarters of these companies abroad.Then when it comes to paying salaries,the company sends money to their head quarters which then pays the expats in Forex. Mean while locally they are paid low wages for tax purposes.

    This is one of the many ways in which foreign companies avoid Tax. It is LEGAL but HIGHLY IMMORAL.

    The irony is, all the huge profits stolen by these companies are then given back to our country as AID through taxes paid to UK,USA and other governments in which the companies are registered for Tax purpose.

    AID = 10%Grants + 90% Loans

    Grants are free money while loans are paid back for long periods of time. If repayment period is 10 years,the country is enticed to pay only the interest for 10. If the country pays the interest faithfully,the the debt is then rescheduled for another 10 years.

    Now calculate how much money the country ends up paying after 20 years?

    • tweka   February 11, 2013 at 11:38

      i like this stuff 4 a change.foreign tax evaders r the real enemies of our country as for local ones,u cant make profit if u dont do dr manda s gymnastics on invoices n receipts.try it.

    • Zambian Soul   February 11, 2013 at 11:48

      It is heart wrecking to see the state of affairs in this country and why we get ripped off as you have so eloquently put it. The mines are not the only companies that practice this immoral tax evasion scheme. Almost all multi-national corporations employ so called “consultants” in Zambia. The gist is that these companies are registered under different names from their parent companies and maintain only a small number of employees on their local HR records while the rest of the productive staff are “consultants” who will not get a contact but receive salaries from abroad. These companies sign contracts with other multi-national corporations abroad and all services rendered by the consultants in Zambia are invoiced and paid by international bank transfers in foreign countries. You see, services are rendered in Zambia, payments are made in other countries and Zambia never sees the taxes. The consultants do not pay taxes, the companies make huge profits but the scope of their actual works are never known locally. ZRA has no way of monitoring such gross misconduct amongst these companies.

  36. Puungwa   February 11, 2013 at 11:19

    Introduce export licences and all mining companies must pay mineral loyalty tax based on those export licences,and why tax refunds? It must be only only on VAT for local capital purchases.

  37. Sachi   February 11, 2013 at 11:01

    Why “source in the Ministry of Finance” its quiet about TAX EVASION (non avoidance) in which his Minister has activly participated as clearly stated in the Final Report of the Commission of Enquiry in to the operations of ZRA? Not “sexy” enaugh?

  38. Movement for Multi-Doctors   February 11, 2013 at 11:01

    Scandalous indeed! And what about Quantum Mining? They are on record as to say they pay about K8 billion per day in tax. Is tax or salaries they pay? Gen Kingsley Chinkuli should explain properly to the nation

  39. Summariser   February 11, 2013 at 11:00

    Let all those who have been evading taxation lose their investments for abrogating their obligations.

  40. dexter   February 11, 2013 at 11:00

    John Chinena,
    I feel you man coz you are spot on!

  41. mosaad   February 11, 2013 at 11:00

    These capitalists(Economical Hitmen,illuminats) can only be stopped if their is political will.They will always thrive if Officials keep getting kick backs to fund elections e.t.c.How can a company continue making losses year in year out and yet its still operational,defies logic.

    • most daring   February 11, 2013 at 16:22

      Ask them my brother!

  42. tweka   February 11, 2013 at 10:59

    pliz how can i be a jerabo?nid to fix these guys.the solution is simple,u weak minded individuals.let the tonnages they export n the total tax paid per yer be publicised in national media.

  43. dexter   February 11, 2013 at 10:58

    Z Watchdog, you are really doing a good job on this one!Keep it up!

  44. John Chinena   February 11, 2013 at 10:43

    And some educated chaps sitting in front of computers (whilst hungry) think Julius Malema is confused when he talks about nationalisation. Even if is done for 24 months only, it is okay. We will make more money than all the credits we have. we ran these mines from 1972 to 2002 (30 years) and we are afraid to run them for a year or even open one on our own. We have been indoctrinated to think only foreigners can ran them; my foot. Why go for elections if campaign promises yield nothing. Come on PF, come to the party: the coffee is smelling good…..!! Please ZWD maintain these scandalous articles so that we whip up emotions and get angery on why we are poor amidst plenty!!They dont want us to get the tax due to us, they dont want tio be shareholders (50%) as in Botwswana/Angola; Now what do they want? They will bring some world Bank and IMF burgers to scare us with funny statistics,. meanwhile the real dollars are going!!!

  45. Nuetral   February 11, 2013 at 10:35

    The government should revoke there operating licences. They should be no negotiating.

    • Kalaba   February 11, 2013 at 10:39

      I agree with you

  46. NgomaZakwathu   February 11, 2013 at 10:31

    Declaring loses year in year out and the thought of closing up is NOT ONE OF THEM on thier MIND. “ZAMBIA THE REAL AFRICA”

    • Ka Kolwe   February 11, 2013 at 11:40

      The law allows them to carry over any of there losses for a period of 10 years

      • Chief   February 11, 2013 at 13:05

        The problem is how these losses are arrived at and there in lies the immorality and crookedness.

  47. Mpangula Mputyu   February 11, 2013 at 10:27

    Vivia gerabos. at least u share in the proceeds from these mines.

  48. Mpangula Mputyu   February 11, 2013 at 10:27

    and u wonder why Zambia is POOR. Viva gerabo’s at least u benefit from the copper which is being mines and books cooked to declare losses for these foreign mines so that they evade tax.

    • NgomaZakwathu   February 11, 2013 at 10:34

      Agree 100% at least GERABOs spend their money in local economic activities.

      • Vilifier   February 11, 2013 at 13:16

        But they take away from the rightful owners who would have done the same.

  49. UNDERTAKER   February 11, 2013 at 10:21

    Cry my beloved country

  50. hundred hameja   February 11, 2013 at 10:15

    We got independent too early. Or we should have held
    the white man to manage the resources and make them citezens coz
    the black man has a problem. This tim stil allowing foreigners to do simple administration jobs sure!!!

    • mwape   February 11, 2013 at 10:48

      but its the same stupid whites who are steeling.

      • yaba   February 11, 2013 at 10:55


      • Cumbu Munshololwa SC   February 11, 2013 at 11:01

        Tone down my friend, WHERE IS GRZ. How can you honestly allow someone to be sleeping with your wife right in front of your nose in YOUR own bedroom?????????????

    • tweka   February 11, 2013 at 11:04

      educate ur pipo n teach them the value of honesty then work on the constitution n make govt organs strong so that they start sending these tax evaders n their zra collaborators to jail.unfortunately,we envy n glorify criminals

      • Ka Kolwe   February 11, 2013 at 11:36

        The way useless opposition leaders people are glorifying Rhupia

    • hundred hameja   February 11, 2013 at 11:18

      Gentlemen lets face it the problem with us blacks is genetic so we cant do anything good alone. Just look at general black africa…its the same. We need white men to be citizens and then we should use them. A research can even be caried out to find out the difference with them.

      • Amuchi   February 11, 2013 at 11:28

        more needs to be done in this country to combat this scourge.