ZIMBABWEAN tax experts this week reactivated the push for government to establish a public exploration firm, as they cast doubts over the credibility of mining data from private multinationals.
Giving insights during a workshop, which ran under the theme; ‘Fight Inequality’, which gave journalists an impression of tax dynamics in the resources sector, the experts warned that exploration data manipulation had opened floodgates for unrestricted plunder.
They said manipulated exploration figures had a huge bearing on the amount of royalties that governments earn from minerals.
The fresh fears added to concerns that billions were being siphoned by big investors at the expense of millions of people battling to shake off mounting hardships.
It also confirms reports that out of an estimated US$12 billion spirited out of Zimbabwe through illicit financial flows, the bulk was pillaged out of the mining industry.
But the rush for Zimbabwe’s minerals has gained traction in the past decade, with Chinese investors leading an influx that has been felt from platinum to gold and, recently, to lithium. On the lithium front, Beijing’s investors poured US$600 million in the last quarter of 2021 alone, demonstrating how Zimbabwe’s minerals have assumed higher demand on the global scale.
Experts told the Zimbabwe Independent that government should take control of the exploration system, instead of leaving multinationals to take charge and wander along minerals.
“Zimbabwe does not know the minerals that we have,” economist Vince Musewe, who spoke to the Independent on the sidelines of the workshop, said.
“We have to know what we have but we can’t rely on exploration companies because the results they produce are obviously to their own benefit. They will under-declare what they find and sometimes they don’t tell you what they have found because they make money from it.
“We can’t wait for third parties to determine that for us because they will produce what benefits them. Zimbabwe needs to have its own exploration. Investors are coming in to explore for us. The Ministry of Mines and Mining Development needs to explore for us and know the value of our resources and potential mineral revenue,” he added.
Towards the unceremonious exit of the late former president Robert Mugabe, ex-Mines and Mining Development minister Walter Chidhakwa tabled a plan to transform the Minerals Marketing Corporation of Zimbabwe (MMCZ) into an exploration company.
The plan ended when he exited government in 2017.
Musewe said accurate exploration data enhances royalties’ collection, helping Zimbabweans out of the heavy tax burden imposed on them by government, as it seeks to generate enough revenue to run the country.
“We need to actually project what royalties we can make from the minerals that we have and you will find that is enough to fund the tax bill of the country if we take away illicit financial flows and account for the royalties,” he said.
“Other counties do that then make sure that their developmental capital does not come from individuals but their resources and that is the paradigm shift that we need. We have to stop squeezing citizens of their money.
“Zimbabweans are going through a lot. We need to reduce their taxes. We can receive that tax from royalties. You will find that it will be profitable and companies will pay, especially when commodity prices are going up on the international market,” Musewe said.
He called for the broadening of Zimbabwe’s tax base, simplification of the tax collection regime, a reduction in tax avoidance and full monitoring of tax evasion by companies and individual.