SECRETARY in the Macro-Economic Planning and Investment Promotion ministry, Desire Sibanda has said Zimbabwe is bound to lose a lot of revenue after it extended “too many tax incentives” to lure investors.
BY VENERANDA LANGA
Addressing a legislators’ workshop in Harare on Friday, Sibanda decried too many secret mining contracts and high incidences of tax evasion by mining companies in Africa, saying they stopped nations from benefitting from their mineral resources.
“There is lack of transparency in the mining sector in most African countries, and accounts of mining companies are not published for all to see where the resources are going,” he said.
“In Zimbabwe, mining contributes significantly to export earnings by over 60% and we need to improve transparency in the mining sector. We should invest heavily in exploration and need to partner with reputable international exploration companies to know, with confidence what is underground, as currently one can say with confidence, that we do not have knowledge of what is underground, to strengthen our negotiations to get good deals,” he said.
Sibanda advocated for value addition of minerals instead of selling them unprocessed, adding Zimbabweans must be fully equipped with diamond cutting and polishing skills to maximise value of diamonds sold.
“Another key area is to avoid illicit financial flows (IFFs), as the recent [former South African President] Thabo Mbeki report on [Sustainable Development Goals] noted that Africa was losing close to $80 billion per annum through IFFs. Mineral leakages, smuggling for personal gain should be avoided.”
Early this year, President Robert Mugabe admitted that the country had lost $15 billion diamond revenue through illicit financial flows.
“On multinational companies, there is need to report their remittances to government and Parliament to promote the aspects of transparency in the extractive industries. State participation requires a Parliament that calls the extractive industries to account, a separate audit function focusing on supporting the Public Accounts and Mines Committees, and a desperate well-resourced minerals taxation unit to curb IFFs and tax evasion,” Sibanda said.