External Consequences of Transfer Pricing: Zambia's Copper Export


 
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External Consequences of Transfer Pricing: Zambia's Copper Export
Anneke Zwart, Student (University), Netherlands, Moderator
Zambia is a country that is very rich in copper, but nevertheless it is also one of the poorest countries in the world. This paradox is mainly a result of transfer pricing by multinational corporations that own most of the copper mines in Zambia. The government of Zambia has estimated that they annually lose 2 billion dollar as a result, which actually comprises 10 percent of GDP. Although the price of copper has been risen largely between 2001 and 2007, Zambia has not seen any profit tax revenue increase. Foreign investors seem to make huge profits but they fail to pay their fair share.

Zambian authorities have accused commodity giant Glencore and First Quantum, which own Mopani (one of the largest mining corporations in Zambia) for using various techniques so as to evade taxation by using its tax haven in Rüschlikon.
Multinationals such as Glencore and First Quantum transfer profits from the high-tax countries in which t...
 

 























 


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