Magande explains how multinationals avoid taxes

MULTINATIONAL companies are avoiding taxes by inflating their operational costs through the involvement of many foreign firms in transactions, says Ng’andu Magande.

Meanwhile, Zambia Sugar has denied engaging in illegal practices aimed at reducing the amount of taxes paid to the Zambian Treasury.

Commenting on revelations by the British charity ActionAid that accused Zambia Sugar Plc of avoiding paying taxes enough to put 48,000 children in school annually in Zambia, Magande said the involvement of too many companies in the operational chains of multinational companies was inflating costs and eroding their tax obligation to Zambia.

Magande, who is Zambia’s longest-serving finance minister, says tax avoidance by foreign multinational firms operating in the country was widespread.

According to the Zambian law, companies only become liable to pay company tax when they become profitable and have subtracted their operational costs from their total revenues.