The Zambia Revenue Authority (ZRA) has uncovered a suspected tax evasion scheme involving fraudulent recovery of input Value Added Tax (VAT), underpayment of Mineral Royalty and non-disclosure of income orchestrated by Baba Kabaso Mulenga, the proprietor of Spax Mining Limited in Chingola.
According to ZRA Corporate Communications Manager, Oliver Nzala , the investigation had been prompted by credible intelligence which revealed a series of “concerning activities that point towards non-compliance and estimated financial losses for the government of over K8.8 million for VAT fraud”.
Nzala explained that the main allegations against Spax Mining Limited and Baba Kabaso Mulenga relate false VAT inputs.
“Investigations revealed that Spax Mining Limited has, through fraudulent means, been making false claims of Value Added Tax (VAT) inputs. The company allegedly submitted misleading information related to VAT inputs, resulting in an estimated loss of over K8.8 million in tax revenues for the country,” Nzala revealed.
Furthermore, Nzala said despite significant mineral operations, Spax Mining Limited had reportedly failed to make substantial mineral royalty payments.
He said the company had no export records to indicate that minerals have been traded or exported from the country, raising concerns about adherence to legal obligations and fair business practices.
“The search was aimed at obtaining evidence to prove or disprove the noted allegations against Spax Mining Limited and its directors.
The discoveries are pointing towards discrepancies in reported production and actual copper operations. Preliminary findings indicate the possibility of active copper extraction not accurately declared to the ZRA, contrary to the company’s declarations,” he said.
ZRA has embarked on a rigorous compliance enforcement programme to ensure that correct taxes are accounted for the benefit of all Zambians.
In this quest to enhance tax compliance, ZRA is urging all taxpayers to correctly declare their taxes. Voluntary disclosures are encouraged to correct any under omissions or under declarations. Tax evasion is a serious financial crime and the Authority will not hesitate to prosecute any taxpayer found wanting.