By Staff Reporter
PF presidential aspirant Chishimba Kambwili has asked Finance minister Dr Musokotwane to tell Zambians his “interests and benefits” in always changing the mining tax regime to benefit mining companies in the country against the majority masses.
And Kambwili said it will be very difficult to stick on Geoffrey Bwalya Mwamba the cases he has been charged with because ministers are not part of the tender committees.
Speaking with Daily Revelation on former Finance minister Ng’andu Magande’s challenge to Finance minister Dr Situmbeko Musokotwane to explain why Vedanta stopped following the development agreement after 2008 when he became minister with Rupiah Banda as president, against that company’s faithfulness when he and president Mwanawasa were in office, Kambwili said he has previously raised similar concerns over Dr Musokotwane’s behaviour when it comes to dealing with the mines.
Kambwili challenged Dr Musokotwane to explain “what interests and benefits he has in changing the minining taxation regime every time he became finance minister.”
He said when president Mwanawasa and then Finance minister Magande were in office they introduced the windfall tax on the mines, which tax he said was not even punitive neither was it even permanent as it was only applied in the event where the mines started enjoying abnormal profits due to the increase in copper prices which were not anticipated for.
Kambwili said one of the first acts of late former president Banda and Dr Musokotwane on coming to office was to immediately remove the windfall tax.
“Again he has changed mineral royalty from its simple calculation based on the mined ore to the complicated one based on the profits made, popularly referred to as deductible tax regime. You know, that tax regime simply gives away the obvious calculation of mineral royalty to a complicated one where you have to justify whether you made profit or not. And in the last 8,9 years very few mining companies have declared profit,” Kambwili said. “So how are we going to collect the mineral royalty? Because mining companies are always going to declare losses by transfer pricing and also by simply upping the cost of production. How do they up the cost of production? For instance, Chinese mines, the mining their contractors are part of the NMC group, Non ferrous corporations. How sure are you that their quotations for developments or mining contracts are genuine?”
Kambwili said once these mines colluded with each other to up the cost of production, they will simply declare losses and subsequently no profit from which to pay taxes to the treasury.
He said the other issue for instance was that Chinese mines mainly procured their supplies from China, mainly from parastatal companies in that country.
“There is in-trading and we cannot believe their cost of production,” Kambwili said. “So in such cases when you make mineral royalty a deductible tax it simply means you are forgetting about collecting taxes.”
He said he did not believe Dr Musokotwane was the right person to be in the Ministry of Finance if the country were to reap just rewards from the mining industry, adding that mining companies like Baluba in Luanshya ended their copper lifespans in the midsts of the concessions that had been awarded to them.
And on the arrest of Mwamba, popularly known as GBM who has been charged with 24 counts, among them the aspect that a company called Curzon was awarded contracts when he served as Defence minister without disclosing that he had interest in the same, Kambwili said ministers did not award contracts.
“Ministers don’t declare interest as and when there is a contract being awarded. Ministers declare their assets and liabilities and interests during the annual declaration of assets and liabilities. So I don’t know how that charge is going to stick, because I was minister for a long time and I don’t remember when the tender committee would come to me and say ‘minister there are these companies that have applied for a contract, do you have any interest in any of them?’” Kambwili said. “I don’t remember any day that I was in office that the tender committee would extend the awarding of tenders to me to declare whether an interest or not, and equally I don’t think GBM also there was a time that they would ask him to. We don’t even know as ministers, we don’t even know which people have applied for the award of contract or who have tendered because there is a tender box where they deposit these things and when they open they don’t come and brief the minister.”
On the fight against corruption, Kambwili said he supported a genuine fight against corruption describing the vice as a cancer to the country, but that there was a difference “when you start a crusade and then you start acting in a weird way in terms of arrests and the charges you give people, the whole fight against corruption becomes rhetoric and unreasonable, like arresting people in Lusaka and take them to Lukulu. There are so many questions that arise.”
Kambwili further said the statements from several UPND leaders showed an element that the fight was being politicised.
