Government is now satisfied with the level of co-operation it is receiving from mining companies in the crafting of a fiscal regime for the sector, following initial resistance by some players, a Cabinet Minster has said.
The Government, together with its partners, is developing a new fiscal regime for the mining sector which is designed to plug leakages and also to nurture an efficient and productive tax system.
The new system was mooted following realisation, last year, that the obtaining tax structure in the mining sector created a host of distortions and administrative challenges.
It also seeks to eliminate duplication in collection of levies as currently Local authorities, the Zimbabwe Revenue Authority, the Environmental Management Agency, Ministry of Mines and Mining Development and the Minerals Marketing Corporation of Zimbabwe all have levies against the mining sector.
Analysts contended that the uncoordinated collection negatively affects viability, transparency and accountability of the sector.
Finance and Economic Development Minister Patrick Chinamasa said the process to create the mining fiscal regime was progressing well.
“We have been working with the Ministry of Mines and the World Bank as consultants to come up with the mining fiscal regime. At first I got reports that there was no co-operation coming from some of the players to give us figures,” he said.
Minister Chinamasa said the Norwegian consultant which the Government hired had intimated to him that mining houses were not forthcoming with the required information.
“I am happy that co-operation is now beginning to flow and I want to encourage you on that path.”
Minister Chinamasa said the Government appreciated that companies, including mining houses, were in business to make profits, but said Treasury also expected its fair share from those proceeds while highlighting that the new regime would create transparency.
“I want you to make profit. I do not begrudge you making a profit but I also want my fair share of that profit and in order for that to happen a fair share to the fiscus, a fair share to you, let the figure be on the table.
Let us discuss, let us argue who should have what percentage. I think it is a better conversation that we should have and if our relationship is built on mistrust, suspicions, then it means sometimes we do things that will not make you make money. So it’s very important that we have that co-operation.”
In 2014, Norway spent $1,8 million on a similar project in Zambia, which resulted in the Zambia Revenue Authority getting $20 million more than its regular tax collections through special audits.
Credit: All Africa