Tough tax regime for miners

HARARE - The Zimbabwe Revenue Authority (Zimra) is proposing a tough mining regime for miners to ensure that the country gets more taxes.

Zimra’s chairperson Willia Bonyongwe last week said Zimbabwe, like all developing countries, needs to find a more equitable tax regime for the mining sector.

“There is need for more transparency and verification through rigorous audits of what is coming out of our ground and going outside. Apart from the precious metals which often use undesignated ports of entry, Zimbabwe needs to verify the exact quantity and composition of the ore going out of its borders,” she said.

This was after mining royalties contributed $16,59 million in the third quarter against a target of $21,93 million, hence performing below target by 24,35 percent. 

Bonyongwe noted that the national tax collector is currently seeking capital to put weighbridges at every border post.

“There is also need to invest in technology at the mines to monitor our resources. In the absence of local refineries, royalties should be paid in ore so government can process its own portion. This kills two birds with one stone, firstly government benefits from all minerals in the ore which is of higher value and secondly prevents transfer pricing,” she said.

The Zimra boss further added that government could also be given information directly from external refineries for all ores processed abroad.

“ZimAsset clearly articulates the need for and benefits of value addition, so we can no longer continue as before,” she said.

Official statistics show that Zimbabwe’s mineral exports increased 25 percent to $1,69 billion between January and September, up from $1,35 billion during the same period last year on the back of increased output.

Mines minister Walter Chidakwa said all minerals, except diamond, had performed positively in the period under review.

“As of September 15, 2017, cumulative mineral exports from January 2017 stood at $1,692 billion compared to $1,352 billion during the same period last year that is January to September. This represents approximately 25,1 percent increase,” Chidhakwa said.

He further indicated that cumulative gold exports in the period under review stood at 14,731 tonnes valued at $631,84 million compared to 14,275 tonnes valued at $575, 978 million during the same period last year.

“This represents an increase of 3,2 percent and 9,7 percent in volume and value terms respectively. Higher production figures could have been realised were it not for incessant rains which affected gold production in the first quarter of 2016,” he said.

In the period under review, platinum generated $617 million compared to $540 million, diamond $63,7 million compared to $89,7m while gold $631 million from $575 million achieved last year in the same period.

Ferrochrome recorded $224 million up from $62 million last year, raw chrome $69 million compared to $7,8 million last year.

Other commodities such as nickel and copper, among others, generated $85 million compared to $75,6 million recorded last year.

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