[miningmx.com] – ZAMBIA was due to unveil long-standing plans for
legislation that would enable its government to monitor foreign exchange flows in an
effort to stamp out transfer pricing, the Financial Times reported.
Citing Miles Sampa, Zambia’s deputy finance minister, the newspaper said that foreign
companies would be given 60 days to deposit funds into a local bank account and
provide supporting documents showing how the earnings were made.
The aim of the legislation, which has been on the cards for some time, was to stop
companies from alleged transfer pricing. Zambia believed it was missing out on some
$2bn in annual tax take, the Financial Times said.
The legislation would apply to the export of goods valued at more than $10,000 and
would apply to companies importing goods into the country as well.
The proposed legislation, which would be released in “the next few days”, according to
Sampa, is part of the measures President Michael Sata said he would institute were
he elected. His populist manifesto also spoke of raising mining royalties so that
Zambians could derive more from mining within its borders.
Zambia produces 800,000 tonnes of copper annually, and mines being developed could
raise that figure to 1.5 million tonnes by 2016, the Financial Times said.
However, the country’s chamber of mines is critical of the proposed measures.
“In the act, they are talking of taking measures to monitor the inflows and outflows of
foreign exchange, but that could mean anything,’ said Frederick Bantubonse, GM of
Zambia’s Chamber of Mines said.
“Our fear is [that] if they are going to reintroduce foreign exchange control, they are
going to cause a lot of harm to the economy,’ he added.
