HARARE: Tax justice in Zimbabwe’s mining sector will remain a pipedream as companies continue to evade engaging communities before they start extraction activities, the Zimbabwe Coalition on Debt and Development (Zimcodd), has said.
Tax justice implies that the pooling and employment of resources should be consistent with the common view of a society.It implies that taxes must not have negative effects on the socioeconomic setup of a nation, but rather should be fair, progressive and should benefit the tax payers.
The concept of tax justice helps in the provision of basic services to communities by ensuring that exploitation of resources benefits all, not only the politically and economically connected.Zimcodd said mining companies had not made efforts to engage communities. Ordinary citizens were not benefiting from resources in their areas, it said.
“Mining companies start prospecting on community land without first talking to the community and obtaining prior informed consent from the community. This means they begin looking for minerals without getting the permission of the community first,” Zimcodd noted in a document.
“Where mining companies do consult with communities, they do not seek prior permission. Instead, they use such consultations as evidence of engagement so as to obtain prospecting or mining licences from the Department of Minerals.”
Zimcodd said in cases where there was engagement between the communities and mining companies, there was often a tendency by the former to hide critical information needed by ordinary people to make informed decisions.
“Thus they deny communities access to environmental impact assessments, environmental management plans, social impact assessments, social management plans, information on hydrological impact, information about the energy consumption, health and safety information, financial information and disaster management plans,” said Zimcodd.
As a result, Zimcodd said communities were deprived of information that allowed them to negotiate from a position of knowledge and power, adding that this had prevented communities from enjoying the benefits of mining, such as joint ownership, employment, procurement and management of mines.
“Mines do not plan and make proper provision for mine closure and completion, leaving communities with massive environmental and social costs post closure.
They do not negotiate in good faith and disrespect community ability to engage and negotiate.
“Mines do not beneficiate minerals locally, provincially or even nationally. They seem to be interested only in shipping out the minerals as quickly and cheaply as possible,” said Zimcodd.
The organisation attributed high levels of tax injustice in Zimbabwe to corruption, debt servicing, illicit outflows, tax incentives, informal economies and external forces.
Zimcodd said to achieve an optimal tax policy system, policymakers needed to balance imperatives such as automatic tax information exchanges, enhanced capacity of revenue authorities, support to the informal sector followed by voluntary compliance, transparency during contract negotiations with the mining companies and accountability by mining companies and government.
“Government must ensure that mining policies do not give excessive incentives to foreign investments, but instead put in place appropriate tax policies that curb capital flight through methods such as evasion and avoidance,” it said.
The Chinese have been fingered in many of the illicit deals in Zimbabwe’s mining sector, with critics saying the Asians had been receiving protection and preferential treatment from government officials who were beneficiaries of corruption in the mining sector.
