Zimra collects $45m mining royalties

HARARE - The Zimbabwe Revenue Authority(Zimra) collected $45 million in mining royalties arrears in the half year to June 2014 as the tax collector intensifies efforts to boost dwindling earnings.

Gershem Pasi, Zimra commissioner-general, said during the period under review, total royalties collected amounted to $112,6 million, 45 percent above target, adding that the arrears were settled in March.

The hard-pressed revenue collector has in recent months been forced to escalate pressure on tax payers to foot government’s huge wage bill and other recurrent expenditure.

After failing to secure budgetary support, government relies mostly on Zimra collections to pay its 280 000-plus workers.

Mining companies in the southern African nation such as Australia Stock Exchange-listed platinum miner Zimplats and Mwana Africa, Caledonia Mining Corporation and Anglo Platinum’s Unki among others, have consistently paid their tax obligations despite operating in a harsh environment.

However, diamond mining companies in the Marange area have been accused of failing to remit mining royalties to Treasury.

A recent report by Zimra noted that at least $1 billion in potential revenue due to the cash-strapped government was being lost every year because those entrusted to manage the diamond resource have either failed in their stewardship role, or were colluding with shadowy dealers to dodge paying taxes to the State.

In 2012, mismatches between government’s revenue projections from diamond mines and actual remittances hit $555 million, while last year, treasury received nothing out of the $61 million originally earmarked from the controversial Marange diamond fields.

The leakages, which are a result of the emergence of secretive enclaves within government and the mines licensed to operate in Marange, are taking place at a time when industry players have ramped up output after sinking more capital towards a world class hub of gems in Zimbabwe.

Output from diamond mines rose by over 500 percent to over 12 million carats in 2012, from about 1,3 million carats in 2009.

Revenues from the sector were expected to track the robustly growing output, but they have headed southwards.

Zimra statistics indicate that royalties from diamonds retreated by $12 million to $22,5 million in 2011, from $34 million in 2010.

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