Mining companies in Zambia to stop tax evasion

Doreen Nawa reports...........

ZAMBIA, Africa’s biggest copper producer is planning to repatriate foreign currency made from exports back to the country in an effort to crack down on tax evasion, mainly in the mining sector.
The ruling, which may come into force in a couple of weeks, would apply to all exports and imports over $10,000, Deputy finance minister, Miles Sampa has said.
According to Mr Sampa companies would have 60 days to deposit funds in any of the commercial banks in the country and they would be forced to provide banks with evidence that supports reasons for transferring funds offshore, such as dividend payments, or to import equipment.
Zambia doubled its mining taxes in November 2011 to six percent saying that the country was not getting enough benefits from its mineral wealth.
Once successful, the increased copper royalties in Zambia are said to be used to pay for social programs and farming subsidies.
Some of the world's largest mining companies operate in the country including Vale SA, First Quantum Minerals, Barrick Gold, Vedanta Resources and commodities giant Glencore.
There are also a number of Chinese-owned mines which have come under criticism lately for mistreating workers.
Contrary to what analysts predicted, the measure did not scared away mining companies such as Glencore International (LON:GLEN), Vale (NYSE:VALE), First Quantum Minerals (TSX:FM) and Vedanta Resources (LON:VED), all of which have copper projects in the country worth billions of dollars.
Zambia is also expected to mend the mining code to enable the government to raise taxes again and implement a 35 percent minimum ownership threshold for state shareholding in projects.
Zambia's copper output is expected to reach up to 1.5 million metric tons by 2016, from around 800,000 tons produced in 2012.