Biti Says Finance Minister Ncube's Proposed Tax Holidays For Platinum Miners Are Unjust

Harare East Member of Parliament, Tendai Biti, has said tax holidays proposed by Finance Minister Mthuli Ncube for Platinum miners are unjust.

In the 2022 Mid-term Budget and Economic Review and Supplementary Budget, Ncube said:

In consideration of the work in progress to establish a platinum beneficiation plant, Government suspended export tax on exports of matte.

This was in sync with an announcement he made during a May interview with ZTN “The Mint Special” programme that the government had suspended the 5 per cent levy on raw platinum exports. He said miners said the levy was choking their operations. He said:

They wrote to me and gave me good reasons as to why this tax is not a good tax and that it is hurting investments. Certainly, in their arguments, I was convinced and the Government was convinced and I also briefed His Excellence (the President).

HOT DEALS:
itel A70 - (128GB, 3GB RAM) $89,
itel A70 - (256GB, 4GB RAM) $99
itel P40 (128GB, 4GB), (6000mAh) $99
itel P40 (64GB, 4G), (6000mAh) $93
Cash on Delivery in Harare & Bulawayo. Tinotumira kwamuri inosvika.

WhatsApp: 0783 450 793

And we decided, as a Government, to remove or suspend that tax, so it’s no longer applicable and this has been welcomed by the platinum industry.

Because it’s about a change in tax, it is always better to effect it in a Finance Bill Amendment, but that tax is not being collected by anyone.

He added that he had directed the Zimbabwe Revenue Authority (ZIMRA) to stop collecting the tax.

Biti, a former Minister of Finance during the Government of National Unity (GNU) said the move would cost Zimbabwe. He said:

The Minister of Finance proposes to suspend the payment of VAT by Platinum mines on unprocessed raw exports. He further proposes that Platinum Houses should pay their taxes 50% in Zim$ yet all their income is US$ export earnings. Unjust tax breaks have cost Africa for decades.

Why was it introduced in the 1st place?

i). To persuade miners to develop domestic value addition facilities, to optimise returns from its vast platinum deposits.

ii). Platinum miners are exporting the mineral to South Africa for refinement, largely in a raw or semi-processed state, depriving the country of significant potential revenues.

iii). Platinum together with gold, generate more than half the foreign exchange inflows from the mining sector.

Zimbabwe has the third biggest known platinum deposits. 

Producing mines:

a). Zimplats (a unit of South Africa’s Implats),

b). Mimosa Mining Company (co-owned by Implats and Sibanye Stillwater of South Africa), and

c). Unki Mine (a unit of Anglo-American).

Other platinum projects at various stages of development:

i). Great Dyke Investments (a joint venture between Zimbabwean and Russian investors)

ii). South African firm Tharisa Capital’s fledgling Karo Resources project and

iii). Bravura, fronted by Nigerian investor Benedict Peters.

Zimbabwe intends to grow mineral loads from mining to US$12 billion by 2023 from US$2.7 billion in 2017.

Pindula News