10 key points to curb mining revenue leakages in Zimbabwe

Zimbabwe is blessed with rich mineral deposits including gold, diamonds, platinum among others and its socio-economic growth prospects hinge on good mineral resource management.

Mining tax contribution, essentially, should play a pivotal role in uplifting the living standards of the majority of poor citizens.

However, mineral revenue transparency deficits, Illicit Financial Flows (IFFs), corruption and harmful tax incentives are some of the challenges deflating much need mining tax contribution to the national purse.

To strengthen citizen data-driven advocacy to hold government and mining companies accountable on curbing IFFs and mineral revenue leakages, the Zimbabwe Alternative Mining Indaba (ZAMI) conducted a breakaway session on Domestic Resource Mobilisation (DRM) in Bulawayo.

The panel comprised of the Reserve Bank of Zimbabwe, the Zimbabwe Revenue Authority, Tax Justice Network Africa (TJNA) and the Zimbabwe Coalition on Debt and Development and the session was moderated by the Zimbabwe Environmental Law Association.

The following recommendations were made during the Session:

There should be a public registry of beneficial ownership and the Companies Act should be reformed to require disclosure of natural persons benefitting from company shareholding.

Zimbabwe Revenue Authority (ZIMRA) should publicly disclose mining tax contribution to the Treasury and to go a step further and publicly disclose mining tax contribution per revenue head.

The cost of tax incentives should be publicly disclosed in the national budget and harmful tax incentives must be eliminated.

Improve transparency and efficiency in tax expenditure if the curbing tax leakages is to translate to better living standards for all citizens.

There should be civil society scrutiny of Double Taxation Agreements (DTA) which are publicly available. DTAs, if badly negotiated, can result in weak fiscal ability of a country where value is created if a country gives away its taxing rights.

Citizens should be capacitated to drive the ‘Stop the bleeding campaign’ to create demand driven accountability from government and corporates on curbing illicit financial flows.

Life style audits are urgently needed to stem some underground economic activities and widen the tax base.

Reverse the erosion of local government tax base e.g. restore the five percent royalties over all mineral resources to enable fiscal capabilities of local government to provide socio-economic services to mining impacted communities. Implement the five percent fiscal transfers as constitutionally provided for.

Prioritise efforts to curb IFFs and harmful tax incentives with as much zeal as the Ease of Doing Business reforms which are now housed under the Office of the President and Cabinet.

National authorities like ZIMRA, Financial Intelligence Unit, ZRP border control and minerals unit must be incentivized to fight corruption and improve efficiency is stemming revenue leakages.

By Mukasiri Sibanda for The Source

(371 VIEWS)