Massive Revenue Losses in Mining Sector Due to Corruption and Illicit Financial Flows: GGZT
The country is losing significant revenue due to corruption and illicit financial flows, stemming from the lack of adherence to tax laws in Zimbabwe’s mining industry, according to an upcoming report by Green Governance Zimbabwe Trust (GGZT).
On Thursday at the Holiday Inn Harare, Green Governance Zimbabwe Trust held a significant validation meeting following the development of its report on corruption and illicit financial flows in the country’s mining sector.
The report, developed over the past year, highlights how the lack of adherence to tax laws promotes illicit financial flows, resulting in substantial revenue losses for the country.
According to Frank Mpahlo, Director of Green Governance Trust, the country is losing significant revenue due to the current stance on taxation in the mining industry.
“This means that the country is losing significant revenue from mining activities due to the current tax structure. For instance, some companies are unnecessarily given tax incentives, allowing them to make super profits at the expense of local revenue mobilization,” Mpahlo said.
“The targeted stakeholders for this report include members of parliament, who are crucial in approving policies, as well as policymakers in government departments and ministries. Importantly, we also aim to give a voice to communities in mining areas. By providing data showing how the country loses revenue through certain tax incentives, we empower these communities to demand government action to close these gaps and prevent further losses,” Mpahlo noted.
The meeting included members of the Publish What You Pay Coalition, a group of institutions and organizations in Zimbabwe dedicated to promoting good natural resource governance. Feedback from coalition members was solicited to enhance the report and increase its impact on specific stakeholders.
According to feedback from the coalition, the human aspect of this issue is particularly poignant. “Instead of granting tax holidays or incentives to mining companies or investors, resources should be used to improve community welfare by building schools, hospitals, roads, and providing access to energy.”
Speaking to Mining Zimbabwe on the sidelines of the meeting, Mpahlo said, “The next steps involve reviewing and finalizing the report before disseminating its findings to ensure the identified gaps are addressed and that mining activities contribute positively to Zimbabwe’s development.”