Monday, May 13, 2013



Stop political tension, Magande pleads with Sata

Leader of the opposition National Movement for Progress (NMP) Ng’andu Magande has observed that the current political situation in Zambia is bad and has pleaded with President Michael Sata to create a peaceful political environment.
Speaking on Sunday Interview on ZNBC Television on May 13, 2013, Magande who served as Minister of Finance under late Levy Mwanawasa’s MMD Administration what was currently prevailing in the country was not encouraging. He said the arrests of politicians and those perceived to be critical of the Sata government must be stopped.
Magande appealed to President Sata to give space to other political players so he could leave a good legacy when his time is over. He said this as he was cut due to time at the end of the programme.
Earlier Magande charged that the ruling PF was taking the country to One Party State of governance.
“We are getting back to one-party-state where it was said publicly that if you don’t vote for us, we will not bring development,” said Magande in reference to statements made by President Sata that he will only develop areas where there are Members of Parliament from PF.
The NMP leader explained that a political party is just a club while a government is broad for all Zambians even those who did not for vote for it. He said the PF is supposed to embarrass all Zambians since it has the mandate to run the country. He said developing only areas that vote for the party in government only happens in a dictatorship type of government.
When asked why his party was not taking part in the by-elections, Magande said the exercise is costing the country alot of resources that could have been put to needy sectors. He said the by-elections that are being initiated have since exhausted the allocation from the budget adding that his party would not waste resources in such an exercise.
“Why would I waste resources where I know the output is not going to be with me?” asked Magande. “These by-elections are not helping us at all.”
Magande said as an economist  he will not waste resources in by-elections where even after wining the Member of Parliament will be taken by Patriotic Front. He said his party will not participate in any by-elections until 2016.
Asked whether he will join or merge with opposition UPND or MMD, Magande said he may think of that in future.
Magande said he was ready to serve the country in any capacity provided he retains his professionalism. He said he will would not hesitate to leave if he joined government found that the ideas being advanced would not impact positively in developing the county.
He said the current politics is too materialistic and that people are their just for their benefit as veteran politician Daniel Munkombwe puts it.
Magande said a number of people joined him when his party was formed with a view of benefiting as they thought he had lots of money as former Minister of Finance. He said these people thought they would get subsistence allowances during campaign tours and when this never happens they left.
“They thought as Finance Minister I had alot of money in some Swiz account but they did not know who Magande is,” explained Magande adding that his party executive was affected when they lost elections.
Magande praised his late boss Mwanawasa of having laid a good economic foundation which he said the current regime is ridding on. He said Mwanawasa introduced National Planning which he (Magande) and his team produced.
He said much as infrastructure development in terms of Road network was a good idea there was also need to come up economical programmes that would help to uplift lives of the majority Zambians who cannot even avoid three meals in a day. Zambian Eye

Sunday, May 12, 2013

Mopani Copper Mines in tax evasion scandal

MOPANI Copper Mines (MCM) has been cited for tax evasion by the 2013 Africa Progress Report led by former Secretary General Koffi Annan.
Zambia is said to have lost millions of US dollars in export earnings in the way MCM is reported to have
engaged in tax evasion with its major shareholder, Glencore, of Switzerland.
This was the second time that Glencore had been cited for tax evasion. The UK government had investigated allegations surrounding Zambia’s lost tax revenues from foreign-owned mines, including claims that Glencore avoided paying up to £76 million a year in tax on its Mopani Mine in the country.
The Africa Progress Panel comprises 10 distinguished individuals from both the private and public sector and notable on the panel were Gracia Michel the wife of Nelson Mandela and late Mozambique president Samora Michel and former Nigerian President, Olusegun Obasanjo.
Zit was on record according to the Guardian of the United Kingdom (UK), that  Zambia lost more than KR41 billion (K41 trillion) in the past 10 years through tax evasion, which could be traced mainly to mining multinationals.
The Guardian reported that the huge sums had been illegally siphoned out of the country, with most of it ending up in offshore banks and tax havens, according to a report by financial transparency campaigners.
It was noted that MCM was selling Copper to Glencore, which is registered in the town of Zug, at prices “far” below those on the international markets, a practice the team identified as “plausible
evidence of transfer pricing”.
Glencore is the world’s largest commodity trading company, which holds controlling stake through Carlisa Investments, a company based in the British Virgin Islands owned in turn by Glencore Finance, Bermuda.
The European Investment Bank, which had extended a loan to MCM, expressed serious concerns about Glencore’s governance but its executives “strenuously” denied any wrongdoing.
“Attempting to estimate the overall losses associated with mispricing has been described as an exercise in night vision,” the report said.
It said several governments in the region have been sufficiently concerned about transfer pricing to investigate individual companies.
One of the most detailed analytical studies, carried out by Global Financial Integrity, put the average annual loss to Africa between 2008 and 2010 at US$38 billion.
The report said to place this figure in context, it was slightly higher than the flow of development assistance to the region over the same period.
Put differently, Africa could double aid by eliminating trade mispricing. Another US$25 billion was lost through other illicit outflows.
It said African revenue authorities were facing difficulties in ensuring adherence to tax obligations.
“Tracking value-added through a maze of interconnected companies linked through shell companies, holding companies and other intermediaries registered in centres from the British Virgin Islands
to Switzerland and London is challenging for even the most developed tax bodies, and governments have identified transfer pricing as a threat to their tax base,” the report added.
It said for authorities in Africa, enforcing tax codes was often impossible.
Additionally, Zambia was reported to have collected only US$240 million in tax revenue from the mines out of US$10 billion that the mineral exports generated in 2011.
The figure which exposed the unfair tax regime against resource-rich countries in Africa represented only 2.4 per cent of the total export value of Zambia’s major export earner.

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