ZASMC calls on Chinamasa to reduce mining royalties

via ZASMC calls on Chinamasa to reduce mining royalties – The Zimbabwe Independent November 1, 2013 by Kudzai Kuwaza

THE Zimbabwe Artisanal and Small Scale for Sustainable Mining Council (ZASMC) has called on Finance minister Patrick Chinamasa to reduce mining royalties in the national budget this month.

ZASMC president Wellington Takavarasha said the steep royalties of 7% discouraged its members from effectively carrying out their operations.

“We have sent our proposals to the Ministry of Finance for the reduction in royalties, pegged at 7%, as people are running away because of this,” said Takavarasha.

He said this was aggravated by a presumptive tax of 2% and, in the case of gold miners, a 6% commission charged by Fidelity Printers. This, in instances, effectively brings the charges government levies on some small scale miners to 15% of earnings. Takavarasha said mining royalties should be reduced to 3%.

The said small scale miners were under-mechanised, with the Mining Industry Loan Fund’s programme, set up to assist small-scale miners to buy mining equipment, managing to secure only 72 compressors countrywide for 30 000 registered small–scale miners.

The ZASMC boss said there was need for government to increase funding to the mining sector as it was the cornerstone of the growth of the country’s economy, adding that the funding small scale miners received from treasury was not commensurate with the contribution the sector made to the country’s fiscus.

ZASMC estimates that artisanal and small-scale miners directly employ about 500 000 Zimbabweans on a full time, seasonal or occasional basis.

Finance minister Chinamasa, who faces the herculean task of reviving the faltering economy, characterised by low industrial capacity utilisation which has dropped from 44,2% in 2012 to 39,6% this year, is expected to introduce remedial measures after extensive consultations with various stakeholders in business.