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Patrick Chitumba in Victoria Falls
THERE is a need to revise mining taxation laws as the country is losing millions of dollars in potential revenue through leakages on exported minerals, Deputy Minister of Finance Dr Samuel Undenge said.
In an interview on the side-lines of the International Conference on Tax in Victoria Falls yesterday, Dr Undenge said the country was not fully benefiting from its natural resources in terms of taxes.
He said because of leakages in the sector, the African continent was losing $160 billion annually — an amount which could be used to develop the continent and improve the livelihood of its people.
“We need to address the issue of leakages in the mining sector so that we maximise on revenue collection. It is even recognised in the Bible that people should pay Caesar what belongs to Caesar.
A lot of companies are not paying tax. That is unacceptable. We should have a win-win situation where the country and the mining companies both benefit from the natural resources,” said Dr Undenge.
He said the African Development Bank (ADB) had availed $4 million to the African Tax Administration Forum (ATAF) to improve capacity of tax administrations in Africa.
“ADB wants to fund capacity building programmes for tax administrations so that they maximise on tax collection. Governments’ source of income is through collection of VAT, income tax and other forms of taxes so that they are able to fund ministries such as agriculture and infrastructure development,” said Dr Undenge.
Meanwhile, officially opening the conference, Dr Undenge said the country had embarked on an economic empowerment crusade by reclaiming ownership of natural resources such as land and other resources.
“This has resulted in the imposition of illegal sanctions on the country, which sanctions have ravaged our economy. Even when we discovered precious diamonds in the Eastern part of the country, our enemies sought to disrupt the trade of such diamonds through mischievous and evil machinations.
The immediate lifting of the illegal sanctions would inevitably increase tax revenues by a significant margin through unlocking value in various sectors of our economy,” he said
“Ladies and gentlemen, our dilemma as Africa is exacerbated by the Western countries’ penchant to cause anarchy in natural resource-rich countries so that they can continue to loot our resources while we concentrate on fighting each other.”
Dr Undenge said Africa was also in a dilemma as in the quest to attract investment, it was offering over-generous tax incentives and reduced tax rates to extremely low levels in what some commentators call the “race to the bottom”.
“In some cases, despite a horde of incentives granted to mining ventures, for instance, there still exists a huge incongruence between the incentives provided by host governments and the revenue realised through taxes and other fees.
“We need to maximise revenue collection so that we can finance other government programmes. Our natural resources are our only leverage and therefore we should use them to develop our nations,” he said.
“The government is considering securitisation of the minerals in order to maximise on them. President Mugabe has even emphasised on the need to develop our infrastructure, finance the agriculture sector to ensure that the government delivers on the social front.”
He said it was high time that the continent looked inward for solutions to its problems instead of depending on foreign aid and donors.
“Let us look at our resources and make sure we are able to finance our own needs. We are sitting on resources but our people are poor.
“We should come up with strategies to exploit and extract the resources and benefit our people,” he said.
Online Reporter