adminHe said this in an interview with this paper amid reports that the country’s largest platinum producer, Zimplats, was denying claims that it owed Government $28 million in outstanding royalties.
Zimra has garnished $7 million from the platinum producer’s bank accounts to get the money.
“All mining entities in the country are required by law to pay royalties and other forms of taxes to Government.
“As Government, we are handling the issue (Zimplats denial of royalties bill) by simply saying the mining entity has to comply according to the laws of the country.
“The entity should remit royalties to Zimra,” said Minister Moyo.
Zimplats argues that the $28 million figure was erroneous and overstated.
In addition, the firm contests that in terms of the Mines and Mineral Act, the mining agreement should be used under the circumstances and not a garnishee order on the strength of provisions from the Finance Act.
Royalties are set as a percentage of gross production, regardless of profits, and are premised on Government owning all the country’s mineral rights.
Minister Moyo, who is also the Minister of State Enterprises and Parastatals, said the percentages for royalties were promulgated by Parliament and were subject to review every year.
“The percentage for royalties has always been reconsidered every year. If you may recall the percentage of royalties were at one time pegged at 2,5 percent, 4,5 percent, 5
percent and the percentage is now at 10 percent,” he said.
In the 2012 national budget presentation Finance Minister Biti increased the royalty on gold and platinum from 4,5 percent and 5 percent to 7 percent and 10 percent respectively in order to maximise the contribution
of mineral resources to the fiscus.
Minister Biti expressed concern over the disproportionate contribution of the rest of the mining sector saying the contribution was unacceptable despite the fact that the effective mining tax rate in Zimbabwe was a “mere” 8 percent.
Online Reporter