FQM negotiates for time solve USD7.9billion tax puzzle...

First Quantum Mining – FQM has negotiated for time to solve its tax puzzle with the Zambian authorities. The Canadian listed miner requested for a month to finalise its analysis of its taxation dues to Africa’s second largest copper producer, Zambia following a USD7.9billion tax bill it was slapped with earlier in the year.

The Vancouver-based company is challenging the assessment from Zambia’s revenue authority the ZRA, which claims FQM incorrectly declared imports for one of its two mines in Africa’s second-biggest copper producer. The government has audited major mining companies operating in the country, which include Vedanta Resources Local unit Konkola Copper Mines and Glencore Corporations local unit – Mopani Copper Mines.

“They are doing their own analysis and they have asked for a bit more time,” Finance Minister Margaret Mwanakatwe, said in an interview in the capital, Lusaka. “We have given them a month so that they can complete the analysis.”

FQM declined to comment on the matter.

The government is seeking to expand revenue collection as it moves to keep its budget deficit to gross domestic product ratio under 10%, while ensuring it maintains its obligations to businesses, said Mwanakatwe.

VAT Refunds

While the Zambian Chamber of Mines says the government owes mining companies more than USD350million in value-added tax refunds, the revenue authority has warned that it won’t pay out where liabilities are outstanding. First Quantum estimated it’s owed USD368 million in unpaid VAT refunds.

First Quantum, which operates the Kansanshi and Kalumbila mines in the country, accounted for more than half of Zambia’s copper production last year and is the biggest individual taxpayer.