Pepsi maker hopeful over Zambia tax dispute By XINHUA | Wednesday, May 23 2012 at 19:55
An Indian firm involved in the manufacturing of Pepsi soft drinks in Zambia has expressed confidence that it would reach an amicable solution with the Zambian government on its disputed tax holiday.
Varun Beverages Ltd was granted a five-year tax holiday by the previous government in 2009 in form of exemption from value- added tax and excise duty, a move that the new government disputed and tried to reverse.
The company then decided to take the matter to court. The company had asked the court to quash government's decision to revoke the five-year tax holiday.
But lawyers representing the company have said the two parties have decided to settle the matter outside court and expressed hope that an amicable solution would be reached, according to Times.
Mulenga Mundashi from Mulenga Mundashi and Company said the parties were making progress in the talks outside court.
"When we last met, we indicated a possible out of court settlement and we confirm that tentative talks have been held and it is hoped that in the next couple of meetings, parties will come up with a position," the lawyer was quoted as saying by the paper when the matter came up for hearing in court on Monday.
A lawyer from the Attorney General's chambers, Joe Simachele, also confirmed the two parties had agreed to settle the matter outside court, Times said.
The Indian firm invested $44 million in 2008 in establishing a plant to make Pepsi soft drinks and then applied for tax incentives in 2009.
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