Three Years of Research Could Effectively Tax ASM
The artisanal and small-scale mining (ASM) sector is crucial for Zimbabwe’s economic growth and development, contributing significantly to foreign direct investment and revenue generation, particularly in gold and chrome production, recent findings suggest that three years of focused research can help design a tax system that ensures the country fully benefits from this vital industry, Mining Zimbabwe can report.
By Rudairo Mapuranga
These remarks were made by Gorden Tonde Chibanda of the Tax Justice Network Africa (TJNA) on Friday at the 2024 CSOs-Parliament Indaba, organized by ZELA and ActionAid. The event ran under the theme, “Positioning CSOs’ Submissions into the 2025 National Budget on Domestic Resource Mobilization (DRM) Strategies and Responsible Mining Standards in the Mining Sector.”
In his presentation titled International Tax Architecture and illicit financial flows (IFFs )– Developments, Challenges, and Opportunities, Chibanda discussed the potential for effectively taxing ASM based on three years of research.
“We inherited most of our taxes from the colonial era, so they don’t reflect our current economic situation,” Chibanda said. He emphasized that the ASM sector is organized in its own way, and authorities need to explore these structures in order to work collaboratively with the miners.
According to Chibanda, proper taxation systems should not only regulate the sector but also ensure that ASM miners feel supported and appreciated by the government.
A key takeaway from Chibanda’s presentation is that a fair taxation system could improve ASM’s contribution to the economy without stifling its growth. He highlighted the need to shift from outdated tax frameworks that do not align with the current realities of the sector. In this regard, developing policies tailored to ASM operations and needs could bridge the gap between miners and authorities, fostering a more productive relationship.
ASM in Ghana: Lessons for Taxation
Ghana offers a potential model for how ASM can be taxed effectively. The country has implemented a system that combines regulation and formalization, which allows small-scale miners to obtain legal licenses while paying taxes. This approach not only helps the government capture revenue but also ensures that miners operate within a structured framework, thereby reducing illegal activities.
By adopting a similar model, Zimbabwe could ensure that ASM miners are formally registered and taxed in a way that benefits both the miners and the country. Supporting miners through formalization initiatives and incentivizing compliance could further boost revenue collection while promoting sustainable mining practices.
In conclusion, for Zimbabwe to truly unlock the potential of its ASM sector, a more nuanced and supportive tax system is essential—one that reflects the sector’s complexities and integrates lessons from other countries like Ghana. This could pave the way for greater economic inclusion and growth in the mining industry.