Government Of Malawi Slaps US Mining Firm With $300 Billion Bill For Unpaid Taxes
Updated: Aug 8, 2022
Africa | Malawi July 30, 2022
Photo: Downtown Lilongwe, Malawi
Government of Malawi has slapped a US mining firm Columbia Gem House that operates in Malawi under the name Nyala Mines Limited, with a staggering $300 billion bill for unpaid taxes and fraudulent export of extracted minerals. That was reported by some media on July 30, 2022.
According to the reports, the Government of Malawi says that Nyala Mines Limited evaded almost all taxes on rubies and sapphires it extracted in Malawi and fraudulently exported to USA from 2008. The US firm has paid only $600 in taxes for an estimated $24 billion revenues it made from extracted minerals in the country from 2008, added the government there.
The $300 billion bill includes unpaid taxes, interest, royalties, and probably penalties from 2008.
In 2017, neighboring Tanzania slapped a Canadian mining firm Acacia Mining with similar bill, a mammoth $190 billion bill for unpaid taxes and fines, that after some tough negotiations was eventually settled with Acacia Mining paying the government $300 million.
The Acacia case became a game changer to Tanzania’s mining industry. It triggered unprecedented reforms to the industry, aimed at ensuring that the country benefits more from extraction of its vast natural assets. The reforms included government taking compulsory stakes in mining ventures (more than 25%), as well as banning export of mineral ores, among others. The latter has reportedly led to development of mineral refining plants in the country since then, enabling the Government of Tanzania to monitor amount of refined extracted minerals hence revenues generated. The policy that implies adding value on extracted mineral ores, also led to generation of jobs.
Malawi that is said to be one of the world’s income poorest nations despite having significant amounts of natural assets, could be following the footsteps of its neighbor. Trying to curb looting of its extracted natural assets by scrupulous foreign investors, and probably also local factors that facilitates such looting, e.g., corruption, inappropriate mining policies, and low capability in deal-making, among others.
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