Hatfield legislator, Tapiwa Mashakada, has called upon Finance and Economic Development Minister, Mthuli Ncube, to review upwards mining taxes in a manner that reflects the sector as the game changer in economic restoration.
The government has targeted the mining sector, which has since overtaken agriculture in contribution to the country’s gross domestic product (GDP), as the lead sector to grow the economy by US$12 billion by 2023.
Speaking in Parliament Thursday, Mashakada, a former Economic Planning and Investment Promotion Minister, in the inclusive government, said the taxation of the mining sector should reflect the direction the country is taking economically.
“The taxation structure in the mining industry must reflect that critical position that mining occupies in the economy,” said Mashakada.
“You know that mining has overtaken agriculture in terms of contribution to foreign exchange earnings, employment and GDP growth. Going forward, I think the mining sector is going to be the leading sector where revenues for the state can be harnessed.”
Mashakada added: “In this regard, I wish the minister to consider reviewing significantly corporate tax in relation to mining so that it reflects its strategic scaling in the revenue sources and also want the minister to review the royalties currently obtaining, even doubling them from their current level. I also want the minister to review the taxes from exports of our minerals.”
The legislator said it was regrettable that Zimbabwe continued to export minerals in their raw form.
“My heart bleeds when I think of platinum exports and then the bi-products that come out of that platinum and how we are losing revenue and even exporting jobs if we are not really taxing our minerals properly,” he said.
“Therefore, let us avoid the natural resource case and be able to harness mining as the driver of our economy and not reap pittance by way of revenue from the mining sector. That is very critical because where we are sitting we are not receiving enough as FDI, we are not accessing international loans as much as we can. Therefore, let us leverage our own natural resources.”
The former cabinet minister said a look at the structure of our revenues in the country, revealed the fiscal space was very narrow.
“We have been grappling with this problem of creating fiscal space for quite a long time now,” he bemoaned.
“Several Ministers of Finance have come in and gone and have actually failed to address this issue of expanding the cake, the fiscal space and also collecting enough revenue to fund, not only recurrent expenditures but also capital expenditures.”
He added that in his view the mining sector had not been adequately taxed, with a lot of mining houses making huge sums of money.
“Look at Marange Fields, the diamond companies, look at Arosa and all these huge multinational companies that have invested in Zimbabwe,” he said.
“At the end of the day, this economy must grow and get proof that we have got these multinational companies through taxes and channelling those tax revenues to fund the fiscus, to fund the budget. I think that is critical. I will appeal to you (Ncube) to review the tax regime applicable to the mining sector so that we can have more revenues going to the fiscal drag net.”