Home » Business » Collect Minerals Instead of Dividends – Zimra Boss

GOVERNMENT should consider collecting a percentage of the minerals mined in the country instead of waiting for its share of dividends from indigenised mining firms, the Zimbabwe Revenue Authority has said.

Zimra Commissioner General Mr Gershem Pasi made the remarks during the National Business Council of Zimbabwe symposium yesterday.

The symposium ran under the theme: “Aligning the Indigenisation and Economic Empowerment Act with ZimAsset-Opportunities for Business.”

Mr Pasi’s remarks come as there is growing concern within Government that the mining sector is not contributing optimally to the fiscus. Government has also identified the sector as the centerpiece for economic growth.

Mr Pasi said “a lot happens between mining and the dividend” and therefore the Government should look beyond ownership of mining companies but to consider receiving the equivalent of the mandatory 51 percent indigenisation share from the ore that is extracted.

In terms of the Indigenisation and Economic Empowerment Act, foreign-owned companies are compelled to sell at least 51 percent stake to indigenous black Zimbabweans.

The equity law was crafted to ensure that previously marginalized blacks are included in mainstream economic activities.

“We need to do something that requires courage especially in mining. We need to go beyond the ownership aspect, beyond the 51,49 percent ownership structures,” said Mr Pasi.

“The rules that we use were crafted by the colonial masters which were designed to ensure that revenues always flowed from the colonies to the motherland. So we have become experts in implementing those same rules but the value that we derive from the minerals is very little,” he said.

Mr Pasi said investors could be allowed to have 100 percent ownership of mining companies, but Government could craft a policy which would allow it to collect a prescribed percentage from the minerals extracted.

“A lot happens from mining to the dividend. We can allow the investors to probably have the 100 percent shareholding but then collect a percentage from the extracted minerals. Then we can start to have resources for the nation. It’s going to the core of wealth creation,” he said.

He said the multi-nationals would most likely lobby against such a measure because it goes to the core of wealth creation. Such a measure would require extensive consultation since mining requires huge capital outlay. He said Zimra will soon introduce automated revenue machines as part of effort of optimising collection.

“We are now going to be bringing automated revenue machines. Our partners will be arriving in the country this week so that we can finish the scope of the projects. We have about four pilot projects running concurrently,” said Mr Pasi.

Meanwhile, Mr Pasi urged the Government to consider reorganising the insurance industry to ensure that the companies invest pension funds in productive sectors.

He said insurance companies should invest in the productive sectors to help solve the liquidity challenges that the nation is facing. Zimra is now spearheading the e-government platform.

“Why are pension funds not playing the role they used to play in the past? Farmers had three tiers of funds then. Parastatals and local authorities have pension funds which are being managed by the big pension funds such as Old Mutual and First Mutual.

“The insurance companies then invest in real estate and grow their asset base. These are funds that should be channelled to the productive sectors,” said Mr Pasi.

Source : The Herald