BANS EMERALD OPEN EXPORTS

…says Treasury losing millions from unregulated exports

GOVERNMENT should ban the open export of emeralds because it is losing vast amounts of money through tax losses, says Kagem Chief Executive Officer Sean Gilbertson.

He said erratic pricing and valuation dictated by buyers disadvantaged the country from obtaining the best prices for the gemstones if auctioned locally.

Mr Gilbertson told the Daily Nation in an interview yesterday, that most export prices were set by the exporters in an extremely dangerous practice because emeralds prices “varied one million times.”

“If an exporter says a shipment of emeralds is worth US$500 when in fact not, how can the government argue? That is why ordinary exports should not be allowed for emeralds as so much tax revenue is lost,” Mr Gilbertson said.

Mr Gilbertson said not allowing open exports is a much better way of ensuring Zambia gets the true value for its emeralds. He said allowing unregulated export of emeralds resulted in the continued loss of revenue which was cardinal to the growth of the economy.

“Most export prices are set by the exporter, this is extremely dangerous as the price for emeralds varies one million times, there is no market price like is the case with copper.

“With the auctions monitored by the Ministry of Mines and Ministry of Finance representatives, this is a much better way of ensuring Zambia gets the true value for its emeralds,” he said.

Meanwhile, Mr Gilbertson has disclosed that US$1.71 million was paid to Zambia as mineral royalty tax from the sale of the newly discovered rare gemstone “Inkalamu” which was auctioned for US$28.4 million in Singapore.

Mr Gilbertson said the mining company paid about six percent as mineral royalty tax for the rare emerald to the Zambian Government.

“We pay our tax to ZRA both mineral royalty at six percent and also corporation tax. The former is paid on each auction. The latter is paid only annually.

“In short, about 18 percent of Kagem’s revenue is paid to ZRA as mineral royalty and corporation tax,” Mr Gilbertson said. When contacted, Zambia Revenue Authority (ZRA) confirmed the payment but could not specify the amount citing tax payer confidentiality reasons.

Mr Gilbertson said the company paid mineral royalty tax on the price achieved at an auction.