Staff Writer

The Zimbabwe Miners Federation (ZMF) is calling for the downward review of small scale miners’ tax regime, insisting that the current taxing level is too steep and stifling production.

Speaking during a discussion organised to deliberate on artisanal and small-scale mining taxation challenges last week, ZMF president Wellington Takavarasha warned that the Government was shooting itself in the foot by pegging high tax fees.

“Government needs to realize that a huge tax burden affects its informalisation efforts and leads to loss of revenue.

“Currently, artisanal miners are ending up having to pay huge royalties to owners of mining permits of normally 30% of net proceeds, after deducting costs, and ultimately it is the Government that loses out, ‘’ said Takavarasha.

ZMF said that there are roughly 40 000 fully registered artisanal and small scale miners out of 1.5 million, and there is need for the Government to dig for more information on those who are not fully registered and tax compliant.

According to Treasury, the Government is losing at least US $1.8 billion to smuggling, illegal dealing in minerals, corruption, fraud, tax evasion, and externalisation of mineral earnings.

Over the last two years, the Government has been reforming the mining sector in a bid to foster compliance and best practices.

Mining authorities have since introduced an electronic mining cadastre, reviewed mining royalties, and offered tax holidays to miners, as well as moving the collection of mining royalties from the Minerals Marketing Corporation of Zimbabwe (MMCZ) to the Zimbabwe Revenue Authority (ZIMRA) to eliminate operational bottlenecks affecting the mining sector.

With the wide ranging reform of the mining sector, the Government is seeking to lay a solid foundation to grow the mining sector to a US$12 billion sub-economy by 2023.

This comes as the Government has set an ambitious target to raise mineral earnings to help clear Zimbabwe’s external debt by 2030.