(Lilongwe) Malawi is claiming more than $300 billion from US-based Columbia Gem House for unpaid tax revenue on gemstones mined in Malawi and exported to the United States, it emerged on Friday evening.
Posted at 7:25 p.m.
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.
Contacted by AFP, Mr. Nyirenda confirmed being the author of the letter, saying 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 society pay $309,600,000,000 in taxes in Malawi, a sum more than a hundred times greater than the impoverished country’s annual budget.
The company and its subsidiary ‘breached 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 pricing techniques inappropriate transference when exploring for rubies and sapphires,” he says.
Mr. Nyirenda adds that Malawi reserves the right to take criminal action against these companies “and against anyone involved in tax evasion and fraudulent export invoicing”.
“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 name of the company sound local so to avoid suspicion and detection,” says Mr. Nyirenda.
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.