Zimra angles for minerals as tax

Published: 14 April 2014

Government should get a percentage of mining companies' production as a form of tax to widen the country's revenue base, an official said today.

Zimbabwe Revenue Authority commissioner general Gershem Pasi said this while addressing delegates at the inaugural National Business Council of Zimbabwe symposium in Harare.

"Mining should contribute meaningfully to the tax base but the taxation rules we use were designed in the 1920s by colonial masters who wanted to make sure their countries benefited more than the country where the mineral was coming from.

"The rules should change so that over and above the 51 percent indigenous shareholding in these mining companies, from whatever they take from the ground, a certain percentage of the mineral should go to the Government as tax," he said.

He said this would widen the tax base and guarantee Government gets revenue instead of waiting for royalties and dividends.

"Minerals in Africa are contributing less than 3 percent to the host countries' economies yet they contribute more than 75 percent to the economies of those countries where they end up in," Pasi added.

He said getting a percentage of the mineral from the companies would be the best way to make sure that Government gets a fair share of the natural resources that are abundant in the country.

Mines and Mining Development Minister Walter Chidhakwa has in the past said mining companies are remitting little in taxes and royalties to Government despite the fact that the mining sector was the fastest growing in Zimbabwe.

According to the Chamber of Mines, the sector grew by 35 percent in the period 2009 to 2011 and has overtaken the agricultural sector as the mainstay of economic growth and now accounts for more than 50 percent of foreign exchange inflows into the country.
- BH24