Behind Zambia’s decision to clear Gemfields of tax evasion
The Kagem probe is one part of a wider effort by the government to track down billions it is suspected of losing to foreign miners
Gemfields subsidiary Kagem, the world’s largest emerald mine, has been cleared of any wrongdoing by the Zambia Revenue Authority following a probe into alleged tax evasion. JSE-listed Gemfields, a world-leading producer of coloured gemstones and owner of the Fabergé jewellery brand, announced on Tuesday that the country’s tax authority’s four-month long investigation had found no wrongdoing by Zambian-based Kagem, which produces a quarter of emeralds globally.
The investigation began on August 16 when the tax authority served two search warrants during a raid at Kagem and which authorised to take wide-ranging documents and files including those used by the company, and an onsite service provider, to allegedly “evade the payment of value added tax, income tax, withholding tax and other taxes”. Each year, the Zambian government is believed to lose billions in illicit financial flows mainly related to its mineral resources sector. The Kagem probe is one part of a wider effort ...