FQM Strongly Denies Reported Links To K76.5 Billion Scam

First Quantum Minerals Ltd has refuted a tax assessment issued by the Zambia Revenue Authority accusing the firm of failing to declare over K70 billion in taxes.

In a statement, the Canadian based miner said claims made by ZRA regarding underpayment of customs duties are untrue.

FQM President Clive Newall said his firm confirms that it is in possession of a letter from the ZRA, dated March 19, 2018, noting an assessment for import duties, penalties and interest on consumables and spare parts of 76.5 billion Zambian Kwacha.

Mr. Newall however said FQM unequivocally refutes this assessment which he said does not appear to have any discernable basis of calculation. He said FQM will continue working with the ZRA, as it normally does, to resolve the issue.

First Quantum’s stock dropped 12.4 percent to C$18 on the Toronto Stock Exchange before it was halted.

On Tuesday, the ZRA revealed that it had uncovered $8 billion tax scam at an unspecified “prominent mining company”, nearly double the total amount the country collected in taxes in last year.

The ZRA said it had issued a preliminary tax assessment of 76.5 billion Zambian kwacha to the unnamed company for classifying imported goods as mining machinery, which attract no custom duty.

He said the import duty on items other than mining machinery ranges from 15 to 25 percent, ZRA said adding that the company had been engaged in the conduct for the last five years.

“We have since notified both the mining (company) and the clearing agent of this unacceptable act of cheating,” ZRA said, without naming the company or the clearing agent.

ZRA’s assessment suggests the total value of goods imported goods was between $30 billion and $51 billion if about $8 billion is unpaid levy charged at between 15 and 25 percent.