The US gemstone miner Columbia Gem House has been targeted by the Malawian government.
According to Agence France Presse yesterday, August 4, the Malawian government claims that US gemstone miner Columbia Gem House owes it nearly $310 billion in unpaid taxes.
The allegations were made in a letter that the attorney general of the east African nation, Thabo Chakaka Nyirenda, sent on July 26.
It claimed that starting in 2008, the US mining company had underpaid taxes on the sales of rubies and sapphires.
On estimated revenues of $24 billion, Columbia Gem House, through its subsidiary Nyala Mines, is said to have paid only $600 in taxes from its Chimwadzulu mine in the central region of Ntcheu.
According to the letter obtained by AFP, Nyirenda claimed that the mining company owed $309.6 billion in back taxes for failure to report its income, trade mispricing, and transfer pricing violations.
According to the letter, "Nyala Mines Limited and Columbia Gem House breached (the law) when they failed to disclose all income realised from the investment and when they engaged in trade mispricing and improper transfer pricing techniques."
Along with tax evasion, royalties, and income from the sale of rubies and sapphires are also allegedly withheld.
The $309.6 billion tax bill must be paid in full within 30 days, plus interest calculated from the date the taxes and royalties were supposed to have been paid.
In order to compel the payment of the taxes, AG Nyirenda has threatened legal action against Columbia Gem House, Nyala Mines, and its directors and officers.
Anyone involved in the alleged malpractices would also be subject to prosecution.
According to the AFP, Columbia Gem House has denied any connection to Nyala Mines, being a party to any lease agreement with the Malawian government, or receiving correspondence from Nyirenda.
By fLEXI tEAM