Finance Minister Under Fire For Proposing Platinum Miners Tax Break

Finance Minister Under Fire For Proposing Platinum Miners Tax Break

Minister of Finance and Economic Development Professor Mthuli Ncube has come under fire for proposing to suspend tax collection from platinum miners for twelve months beginning January 2022.

Platinum producers pleaded with the government to eliminate beneficiation taxes and replace them with incentives in order to attract investors. Now, government has now proposed a tax holiday through the Finance Bill.

Tabling the Finance Bill (H.B. 9: 2022) in parliament the minister said, “The Bill also seeks to suspend the operation of Section 12(d) which pertains to the collection of tax on exportation of unbeneficiated platinum and determination of value thereof of the Value Added Tax Act for a period of 12 months with effect of 1st January, 2022.

“This is in consideration of the work in progress to establish a platinum beneficiation plant. So we have suspended that tax in order to support the platinum companies which are making very good progress, Mr. Speaker Sir.”

However, this did not go down well with Dzivarasekwa legislator Hon. Edwin Mushoriwa who reminded the minister he brought the same proposal in 2019. Unfortunately, the tax holiday had not produced the desired results.

“In 2019, we had a same clause in his Finance Bill and we were told that the platinum miners were going to come up with a refinery of platinum by 2021.

“We do not want to believe that we should continue to allow these miners and I think Hon. Members, well pertaining to how much these platinum mining companies are actually switching and taking advantage of Zimbabweans.

“We cannot therefore allow a question that will suspend the operations or the collection of tax on exported raw platinum.

Biti urges the house to reject tax holidays for platinum miners

On the same wavelength, Harare East legislator Tendai Biti urged the house to oppose the proposal as this short changes the country.

“Supplementary budget means that our initial budget was not well funded.

“To that extent, we will not want to have a situation where revenue which is supposed to come from these miners can actually be suspended.
“There is no justification and no reason. Accordingly, I urge the House to actually support that the Minister should delete this proposal from this Finance Bill because it will not help us as a country,” Biti added.

In his defence, the minister of finance insisted that he consulted widely before coming up with the decision to suspend tax collection from Platinum miners.

While the proposal was to postpone tax collection, Ncube stated that the same measure was to hike royalities. “…..increase in the royalty for platinum sector and lithium from 2% to 5% because those were considered together,” Ncube said.

Zimbabwe is endowed with vast mineral resources, however it has been facing financial and economic challenges for over two decades. This has been attributed to corruption, illicit financial flows and tax evasion.

Finance Minister Under Fire For Proposing Platinum Miners Tax Break