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US firm In $309 Tax Evasion

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US-based Columbia Gem House has expressed ignorance of a demand letter by Attorney General (AG) Thabo Chaka-Nyirenda demanding $309.6 billion (about K320 trillion) in unpaid taxes.

According to a New York-based online publication, Law360, Columbia Gem House brand manager Natasha Braunwart on Tuesday said the company does not own Nyala Mines Limited nor was in receipt of any communication from the AG.

Chakaka-Nyirenda, in his letter dated July 26 2022, linked Nyala Mines to the Washington-based firm Columbia Gem House as its subsidiary, which he accused of evading taxes.

Wrote a demand letter: Nyirenda
In the letter, the AG said he received instructions from the Ministry of Finance and Economic Affairs to pursue the matter following failure by Nyala Mines Limited to pay taxes on ruby extracted from Chimwadzulo Mine in Ntcheu.

But Braunwart told Law360: “Columbia Gem House is not, and never has been, an owner of Nyala Mines or any other entity in Malawi, nor a signatory to any lease agreement with the Government of Malawi. Neither we nor the US Embassy in Malawi have received the July 26 2022 letter ostensibly drafted by Malawi Attorney General Thabo Chakaka-Nyirenda.”

She further said the US Embassy in Malawi was supposed to receive the letter from the Malawi Government.

“It is our understanding that it is normal protocol for an embassy to receive such correspondence from a foreign government which again, raises further concerns,” said Braunwart.

But Chakaka-Nyirenda in an interview yesterday said the letter was not addressed to the US Embassy.

But insisted that the letter was sent to the company’s postal address.

He said: “We don’t expect the embassy to respond. The letter was sent to Columbia Gem House through the address indicated in the letter.

“The letter clearly explained how the Columbia Gem House owns companies by creating shell companies with the aim of evading the payment of application taxes.”

The AG further said his letter explains the involvement of Columbia Gem House, including the use of trade mispricing and improper transfer techniques.

“Also, they created front or shell companies to evade the payment of applicable taxes in Malawi,” he said.

Between August 25, 2008, and July 30 2013, Nyala Mines paid more than K604 000 ($592) in taxes, according to the letter.

Over the same period, each year the company exported around 300 kilograms (kg) of sapphires and 150 kilograms of rubies and padparadscha, a rare type of pink sapphire, according to the letter

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