FQM is embroiled in a tax dispute in Panama

This week, First Quantum Minerals is in a dispute with the Panamanian government over royalties and corporate tax, while Samsung India is facing a show cause notice in the country over customs duty.

On Tuesday, January 10, Canadian mining corporation First Quantum Minerals threatened to close its huge copper mine in Panama due to the government's corporate tax demands.

The price of a year's worth of taxes in Panama is $4.7 million. In 2021, the Canadian corporation earned $1.4 billion and paid $61 million in corporate taxes.

FQM CEO Tristan Pascall has stated that the business will place its mine on "care and maintenance" if the Panamanian government does not provide legal guarantees, notably over the future of the tax regime.

In January 2022, Panama reached an agreement with FQM under which the business would pay the government royalties ranging from 12% to 16%. This replaced a 2% revenue royalty that was part of a 1997 agreement.

President Laurentino Cortizo has been tough on the Canadian mining business. He even ordered a halt to the mining operation until a definitive contract was finalised.

Samsung India faces show cause notice for alleged customs evasion

On Thursday, January 12, Samsung Electronics India said it is reviewing a show cause notice issued to company over charges that it evaded INR17.2 billion ($212 million) in customs duties.

According to Reuters, Samsung India is seeking legal counsel after the Directorate of Revenue Intelligence (DRI) issued a notification about the classification of network devices.

"This is a tax controversy requiring legal interpretation. "We are analysing the notice and seeking legal advice," a Samsung India official stated.

Samsung India is accused of misclassifying network devices, notably remote radio heads, in order to obtain an unfair customs exemption. Following the publication of these charges in the Indian news, the DRI decided to open an investigation.

The DRI has also issued a show cause notice to PwC, one of the "big four" accounting firms. Samsung India hired the firm to classify network equipment. PwC's associate director has reportedly been questioned as part of the probe, although the business has not publicly commented on the charges.

HMRC is facing a 'black hole' of £42 billion in unpaid taxes.

According to the House of Commons Public Accounts Committee on Wednesday, January 11, the UK tax authorities HM Revenue and Customs (HMRC) failed to collect £42 billion ($51 billion) in taxes.

The UK government has failed to do more to guarantee HMRC can increase tax collection, resulting in billions being lost, according to the committee.

"The staggering £42 billion presently owed to HMRC in unpaid taxes would have filled a significant portion of this year's famed public spending black hole," said Meg Hillier, chair of the Public Accounts Committee.

HMRC is said to have failed to collect around 5% of all taxes payable each year. According to the committee study, this is due to a lack of tax compliance resources. This lack of resources also impedes the response to fraud on COVID-19 support programmes.

Fraud in similar schemes cost an estimated £4.5 billion. HMRC anticipates recovering only a fraction of the monies lost. This is in addition to the Public Accounts Committee's estimate of £42 billion.

Former Trump Organization CFO receives five-month jail term

On Tuesday, January 10, former Trump Organization CFO Allen Weisselberg was sentenced to five months in prison and five years on probation.

In December, the Trump Organization was convicted of 17 counts of tax fraud after Weisselberg agreed to a plea agreement with New York prosecutors in which he recognised his own wrongdoing and testified against the firm.

He might have faced up to 15 years in prison if he had not accepted the bargain. Weisselberg must pay over $2 million in taxes, fines, and interest on undeclared assets as part of his punishment.

The Trump Organization is expected to pay a fine during Friday's sentencing hearing, but it may also suffer sanctions that prevent it from obtaining financing or federal contracts. This could hold the company back in future transactions.

As part of its economic strategy, China is extending VAT benefits.

On Monday, January 9, the Chinese Ministry of Finance and the State Taxation Administration published a joint announcement to extend VAT benefits for manufacturing and lifestyle services.

Taxpayers will see the measures extended until December 31, 2023. The VAT deduction for production services, however, has been decreased from 10% to 5%, while the VAT deduction for lifestyle services remains at 10%.

The majority of the VAT exemption is aimed at small firms with less than 100,000 yuan ($14,700) in monthly sales. But the Ministry of Finance may be considering more tax reductions to stimulate growth throughout this year.

Analysts predict that China's GDP growth rate will increase from 4.7% to 5.3% in 2023 as a result of its 'zero COVID-19' programme. The Chinese economy may be on the verge of resuming development as the country eases various restrictions.

By fLEXI tEAM