Now Daily Analysis
The revelation by Willia Bonyongwe, the wife of Central Intelligence Organization director-general Happyton Bonyongwe and chairperson of the Zimbabwe Revenue Authority (Zimra) board that mining companies are contributing less and less to the fiscus through taxes is quite disturbing. This probably means the death of our big-spending government’s last cash cow.
In the first half of 2015, mining companies contributed just $40 million, which is $73 million less than in the corresponding period in 2014. What is atrocious, however, is that mining companies in Zimbabwe can shirk off their obligations and blame it all on falling mineral prices on the world market. To cap the madness, the taxwoman accepts this lousy explanation and treats the situation as normal.
Said Bonyongwe:“Mining royalties contributed US$39 million against a target of US$64.9, which translates to a negative variance of 39%. There has been a 65 per cent decline in revenue collections as compared to the same period last year where US$112.6 million was collected. The performance of the revenue head can be attributed to depressed international prices and lower sales.”
If the mineral price fall is that bad, how come every mining executive in town is driving a new fancy car and buying a helicopter? Did the price of gold or platinum plummet by 70 per cent during the review period? No.
The story which is not being told is that mining companies are evading tax, mainly through authorized but questionable or even immoral expenditures.
Mimosa mining company is a typical example. Its top executives go on paid holidays for months, staying in top hotels in Australia or wherever they choose. Junior workers are paid peanuts compared to platinum workers in neighbouring South Africa. The company sponsors football teams and numerous other costly recreational activities, just to avoid tax.
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Now Daily Analysis