The Zambian unit of Vedanta Resources Plc is suing the country's tax authorities over a ZMW3.2 billion or USD586 million tax charge imposed on  its exports for copper cathodes. 

In a court documents filed, Konkola Copper Mines Plc is seeking the Lusaka High Court's action to invalidate the imposed tax charge of 16% value added tax on exports for the period between January 2011 and March 2013. The petition further seeks the reversal of the tax authority's decision to impose the tax from July of this year.

According to KCM Business Controller Joel Chitambala, "There are serious legal questions to be determined with regard to the legality of the assessments." In his affidavit, he said the taxes imposed would 'heavily impact the company's position in servicing its financial obligations, including disbursement of salaries. 

Zambia had instituted a law last July to for the better monitoring of exports by the state. This is due to the claim that mining companies have been avoiding payment of taxes by as much as USD2 billion. KCM's relationship with the government has become fractious, especially after the threat of retrenchment of 1,529 workers last November 1. Now, after a tax audit, it was found the non-compliances and the non-payment of taxes.