Local suppliers chide Lumwana over contracts

THE move by Lumwana Mining Company to outsource goods and services through Trade Corp, a South African company, is aimed at avoiding paying tax, says the Association of Mine Suppliers and Contractors (AMSC).

AMSC president Augustine Mubanga said Government should scrutinise the outsourcing carefully to curb tax avoidance, particularly the Value Added Tax ( VAT).

Mr Mubanga was reacting to the decison by Lumwana to outsource goods through Trade Corp during a media briefing in Kitwe yesterday.

He disputed Lumwana's claim that the decision was meant to reduce costs and procure goods and services on timely basis.

Mr Mubanga said it was unacceptable and an insult to think that Zambians have no capacity to be engaged in high value procurement.

''Just as it is very difficult for Zambians to supply to mines in South Africa, and South Africans always claim their rights to their minerals so shall it be to us,'' Mr Mubanga said.

He said Zambians shall invoke the law and cite Lumwana Chief Executive Officer and Supply Manager for breach of the Mines and minerals Act and apply the penalties as guided by the law.

''Clause 20 (3) a person who contravenes subsection (1) or (2) is liable to pay a fine of five hundred thousand penalty units and an additional fine of twenty thousand penalty units for each day during which the default continues,'' he said.

Mr Mubanga said Lumwana had given long term contract for supply of bolts and nuts, stationery.