Zimbabwe earned only US$18 million in diamond dividends last year-IMF

Zimbabwe earned only US$18 million in diamond dividends when the government had estimated that it would collect US$70 million but it has now introduced measures to ensure that it gets its dues, the International Monetary Fund says in its latest country report.

These include the 2014 Finance Act, signed into law in April 2014. It introduced the withholding of a special dividend equal to 15 percent of the gross proceeds from diamond sales.

The government also set up a joint task force composed of technical staff from Ministry of Finance, the Ministry of Mines and the Zimbabwe Revenue Authority to forecast and monitor diamond-related revenue flows.

The government submitted to Parliament the 2012 audited financial accounts of the Zimbabwe Mining Development Corporation (ZMDC) and published them online in May 2014.

Following the lifting of European Union sanctions against the ZMDC, the Minerals Marketing Corporation of Zimbabwe conducted two diamond auctions in Antwerp in December 2013 and February 2014 and one in Dubai in March 2014.

According to the IMF, the government now intends to ensure that all diamonds are sold through auctions at international trading centers.

“More fundamentally, the authorities are analyzing the structure of the diamond sector to streamline the number of companies in it. They also intend to undertake a thorough reassessment of the fiscal regime for mining, including diamond mining,” the IMF says.

There have been reports that diamond mining companies in Marange are scaling down their operations and retrenching workers but no one is talking about how diamonds are being marketed after the Dubai auction.

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