The Zimbabwe Revenue Authority (Zimra) is closing in on thousands of small-scale gold and artisanal miners across the country, according to sources, ending a tax honeymoon which both industry and the Government fears could lead to massive gold smuggling.
Sources within the tax authority say plans are underway to start taxing these miners together with other business units in the informal and small scale brackets who have so far escaped the state’s revenue collection net.
But the Ministry of Mines and Mining Development is warning the country’s tax collector to take a “more cautious” approach around a sector which could bleed the National Treasury through illicit dealings.
Zimra’s plans also come at a time when Government has set up a team to investigate massive gold leakages prejudicing the country of millions of dollars in potential revenue.
The small-scale and artisanal miners account for close to 45 percent of Zimbabwe’s bullion production, which hit 10 million kilogrammes during the first six months of the year.
Gold is Zimbabwe’s second largest foreigner currency earner after tobacco.
To enhance deliveries to Fidelity Printers and Refiners, an arm of the Reserve Bank of Zimbabwe, from small- scale and artisanal miners, the authorities directed that all gold sales be done on a “no-questions-asked basis”.
Government officials estimate that over 40 000 small-scale and artisanal miners are active around Zimbabwe.
Sources within Zimra told Business Weekly that plans were underway to start taxing the miners as Zimra intensified collections from the informal businesses.
“There is huge resistance, but its real,” said one source who spoke on condition of anonymity.
“Zimra is pushing for 15 percent income tax on profit or presumptive tax of $150 per month.”
No official comment could be obtained from Zimra yesterday.
Mines and Mining Development deputy minister Fred Moyo confirmed the development, saying his ministry was yet to establish how Zimra would want to tax the miners.
“Yes, Zimra intends to tax small-scale miners. We don’t know how Zimra would want to do it, but we are seeing it as a big risk,” said the deputy minister. “This can easily make the miners runaway. It is our view that Zimra should engage our ministry, which is better positioned to encourage the miners to pay tax. It is their obligation.”
Moyo said his ministry and the Ministry of Finance could engage and come up with a position.
“Since Zimra falls under Finance Ministry, we are going to engage them,” said Moyo.
Zimbabwe Miners Federation, a body which represents about 12 000 miners said their members were holders of the licenses issued by the Mines Ministry and were not “not obliged” to pay tax.
“Our members are not operating as companies and are not registered for tax,” ZMF chief executive Mr Wellington Takavarasha said in an interview.
“We are, however, prepared to engage in a constructive manner such that we can encourage our members to register companies. We are not saying what Zimra is doing is not right.”
Probe into Gold smuggling
According to estimates, Zimbabwe could be losing millions of dollars through gold leakages.
The probe team, being led by a director in the Ministry of Mines has been tasked to mainly look into production and trading circles of the commodity, Moyo said.
It will also investigate how Zimra’s intention to tax artisanal gold miners could trigger an upsurge of illegal gold trading as well as looking into whether part of the foreign currency allocated to large to medium companies was not finding its way on the illicit market.
Further, the team was expected to provide estimates on how much Zimbabwe could be losing through illicit deals.
Moyo said the investigations were expected to be completed in the next few weeks, which would help the Government come up with policy measures to plug the leakages.