HARARE – A second lawsuit has been filed against finance minister Mthuli Ncube’s “unlawful” five-year tax exemption for platinum miner Great Dyke Investments.
The company, which has set up a US$3 billion mining project in Darwendale, Mashonaland West province, is a joint venture between Russia’s Vi Holdings and Zimbabwe’s Landela Mining Venture (Pvt) Limited.
Ncube issued the reprieve recently in terms of the Income Tax Act (Chapter 23:06) in a directive published on January 27, 2021, granting that for the next five years, Great Dyke Investments will not be obliged to pay any taxes from its mining operations, sales or profits.
The Zimbabwe Lawyers for Human Rights (ZLHR) filed the first lawsuit seeking to overturn the measure a few days ago.
And through the Zimbabwe Human Rights NGO Forum, the Center for Resources Governance and Transparency International Zimbabwe have also asked a judge to set aside the “unlawful” tax break on an urgent basis and order the company to pay its dues.
“The action of the first respondent (Ncube) in granting the second respondent (Great Dyke) income tax exemption for five years is neither reasonable nor is it substantively fair,” the petitioners argue.
“The applicants, therefore, make an application on an urgent basis, for a provisional order to set aside Statutory Instrumental 26/2021 by means of which the first respondent granted the tax exemption to the second respondent.”
The application cites the Zimbabwe Revenue Authority (ZIMRA) and the Parliament of Zimbabwe as third and fourth respondents, respectively.
In a certificate of urgency deposed by lawyer Forgive Siyawareva on behalf of his clients, the applicants argue the matter is urgent and should be heard immediately so the country is not prejudiced of any dime.
“This matter is of great and critical urgency since it involves a matter of the national discussion at a time when the government of Zimbabwe needs every revenue generation scheme to deal with negative effects and demands placed on it by the Covid-19 pandemic and lockdown that has affected enterprises,” Siyawarera said.
“In my view, more than ever, there is need to rely on the industries that are deemed essential and are operating despite incessant and unpredictable lockdowns as the major taxpayers and therefore the application cannot wait until the indefinite lockdown is over and then be filled on the normal roll.”
Siyawareva argues the country requires immediate revenue to purchase coronavirus vaccines and administer free testing and to capacitate medical institutions across the country, among other things.
Centre for Natural Resources Governance programs manager Henry Nyamapokoto also questioned the tax break in supporting court papers saying the cash-strapped country cannot afford to lose any money in such a manner.
“The responsibility of such a venture is questionable and doubtful at a time when the government of Zimbabwe is currently dealing with the Covid-19 pandemic and there is every need of finances to combat the spread of this deadly virus.”
Both matters are yet to be heard.