According to the Minister of Justice, the company Nyala Mines Limited would have paid only 600 dollars in taxes on 24 billion in turnover.
Malawi is claiming more than $300 billion from the American company Columbia Gem House for unpaid tax revenue on gemstones mined in Malawi and exported to the United States. A letter from Justice Minister Thabo Chakaka Nyirenda, dated Tuesday and addressed to Columbia Gem House, accuses the US company of evading customs duties on sales of rubies and sapphires mined from its Chimwadzulo mine in Ntcheu , in Malawi, since 2008.
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Contacted by AFP, Thabo Chakaka Nyirenda confirmed being the author of the letter, claiming that Nyala Mines Limited, a subsidiary of Columbia Gem House, only paid around $600 in taxes out of the $24 billion in estimated revenue from its operation in Malawi. It demands that the company pay 309,600,000,000 dollars in taxes in Malawi, an amount more than a hundred times greater than the annual budget of the country, one of the poorest in the world.
Possibilities of criminal prosecution
The company and its subsidiaryviolated their fiduciary duties and the law in Malawi when they failed to disclose all income earned from the investment and when they engaged in improper business practices and improper transfer pricing techniques in connection exploration of rubies and sapphires“, he says. Thabo Chakaka Nyirenda adds that Malawi reserves the right to take criminal action against these companies “and against anyone who has participated in tax evasion and fraudulent export invoicing“.
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“Malawi’s position is that you dishonestly changed the name of the mining company to Nyala Mines Limited to disguise the origin of the company i.e. to make the new company name sound local in order to to avoid suspicion and detection“, he added. He further accuses Nyala Mines and Columbia Gem House of fraudulently exporting rubies and sapphires from Malawi, enriching themselves unfairly by failing to pay due taxes and royalties. Nyala Mines Limited and Columbia Gem House had no immediate comment.