The Sunday Mail
Government is putting together a world class fiscal framework to plug mineral revenue leakages and ensure that Zimbabweans benefit optimally from the country’s vast wealth.
The initiative is being funded by the Norwegian government, which has so far contributed US$156 000 and tax management expertise.
Norway is reputed globally for its top-shelf tax practices and has helped other countries such as Zambia, Tanzania and Mozambique.
The proposed framework will enable authorities to track transactions from mine production right up to the marketing stage.
Estimates by the Zimbabwe Economic Policy Analysis Research Unit (Zeparu) indicate that the country could have lost US$239 million between 2009 and 2013 due to under-invoicing by miners.
In an interview last week, Mines and Mining Development Deputy Minister Fred Moyo said: “This is part of the most important work the ministry is seized with at the moment.
We have a problem; the information is not known; what the companies will have mined and what Government receives.
“What this system will do is make sure every transaction is accounted for at every stage of production so that full transparency is achieved.”
Cde Moyo said there was miscommunication between his ministry and mining companies.
“There is an information gap because mining companies are saying they have the information, but the ministry says it does not. We have tried to get to the bottom of this and realised that it is, at times, a matter of interpretation.
“There is no proper interpretation somewhere between the mining companies and ministry, especially regarding figures and technical detail.
“At times, there is lack of co-ordination between departments, and that is what we are working to address.”
Norwegian Ambassador to Zimbabwe, Mr Bard Hopland added that other countries that adopted the system have seen their revenues increase.
“Norway has supported the Zambian Government in establishing a more effective tax regime for the mining sector.
“Better capacity and competence in the Zambia Revenue Authority (ZRA) has paid off: In 2014, Norway spent USD1.84 million on this programme and ZRA collected an additional amount of K134 million (USD20 million) over and above their regular tax collections through special tax audits undertaken with this support.
“In Tanzania, Norway spent USD 1 million on derivatives experts and the Tanzania Revenue Authority (TRA) were able to increase the tax base with USD200 million, which else would have been deducted against the Tanzania revenue base.”
Mining companies operating in Zimbabwe are supposed to pay royalties, corporate income tax, value added tax, customs duty and capital gains tax, among other levies.
They should also provide full production figures to the parent ministry.
However, mismatches have often been noticed during consolidation of figures while some companies are said to be withholding key data to mask their shady deals.
Zeparu — in its latest research — noted that “too many hands” were involved in mineral revenue collection, thereby “blurring the picture of overall mineral revenue contribution to Government”.
The unit also pointed out that quasi-fiscal operations around mining fees by various Government departments could undermine revenue flows to the fiscus.
