MMCZ wants tighter diamond controls

THE Minerals Marketing Corporation of Zimbabwe (MMCZ) has called for a law to set guidelines on how local rough diamond sales should be conducted and the subsequent payment of royalties.

By Gamma Mudarikiri

This promptly follows revelations by the Parliamentary Portfolio Committee on Mines and Energy on the prejudice suffered by the government in joint venture investments, irregularities in the selection of investors and disparities in revenue inflows from the diamond sector.

In a submission made to the State Enterprises and Parastatals ministry, MMCZ said there was an anomaly with regards the collection of royalties as it was enforced through a General Notice 16 of 2004 rather than a statutory instrument.

“The royalties should have been forced through a statutory instrument and not a general notice,” part of the submission reads.
“The ministry should by now have drafted a statutory instrument on royalties which should have been forwarded to the Attorney-General’s Office for publishing,” the submission added.

MMCZ, sole marketer of all minerals produced in Zimbabwe except gold and silver, also proposed that a statutory instrument should be put in place to set guidelines on how local rough diamond sales should be conducted, as there were irregularities with regards General Notice 181 of 1983 on commission rate.

The MMCZ Act requires that the minister, after consultation with the corporation, by notice in Statutory Instruments, fixes the amount or amounts that the corporation shall levy as a commission, yet currently MMCZ is collecting revenue in terms of the General Notice 181 of 1983.

MMCZ said this was not compliant with the said section as a general notice was not legally binding.

“It is simply a notice and is therefore not legally enforceable,” MMCZ said.

The corporation also argued  that it must be  exempted from  paying value added tax (VAT) as  the commission paid by MMCZ as per general notice 181 of 1983 is already considered  a government levy or tax.

The payment of VAT the corporation said, would be double paying of tax.

MMCZ said a full submission had already been made to the Mines and Mining Development ministry to rectify the anomaly.
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Other Acts governing the corporation include the Minerals and Marketing Corporation of Zimbabwe Act Chapter 21:04, Precious Stones Trade Act Chapter 21:06, General Notice 16 of 2004, Royalties, VAT Act Chapter 23:12, among others.

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