Harare — Zimbabwe's mining sector has failed to contribute meaningfully to the country's economy in the recent years with Government now working towards reviewing tax laws to ensure maximum benefits from its huge mineral resources.

Speaking during the presentation of a US$236 000 interim dividend to Government by the Minerals Marketing Corporation of Zimbabwe yesterday, Finance Minister Tendai Biti noted that earnings from the mining industry remained subdued due to multiple tax rebates and concessions.

"We have numerous tax rebates and we are working on amending the Income Tax Act such that we have equitable taxation on mining companies," Minister Biti said.

Minister Biti revealed that some mining firms have not been declaring profits since 1996.

Last year, the mining sector contributed US$4 million in royalties and corporate tax to the fiscus, despite huge profits realised during the period.

"It is unacceptable that we hardly get anything from the mining companies."

Royalties on precious metals are levied at a rate of 3,5 percent of the gross market value.

Mines and Mining Development Minister Obert Mpofu said the declaration of an interim dividend of US$236 000 reflected that the turnaround strategy adopted by MMCZ had started bearing fruit.

"You have set the tone and pace, and with the prospects in the mining industry looking good, it is quite possible that you can easily surpass the dividend figure of US$236 000," he said.

Minister Mpofu hailed the MMCZ board for declaring a dividend when most companies are emerging from the global economic crisis.

He said the board was given a mandate to ensure that Government's expectations are fulfilled.

"The board was expected to play a leading role in transforming Government policies into tangible and realistic business outcomes.

Minister Mpofu urged parastatals under his ministry to start contributing to Zimbabwe's economic turnaround efforts.

Minister Mpofu said Government would be working with the Zimbabwe Revenue Authorities in all its mining and marketing activities to ensure transparency.

She, however, said this would exclude proceeds from Chiadzwa diamonds and companies currently on tax exemptions. The Zimbabwe mining sector is projected to grow by 40 percent this year buoyed by increased output in gold and platinum.

Platinum and gold are expected to contribute significantly to the 40 percent with the moderate performance of other minerals giving impetus to the projected growth.

It is expected that Zimbabwe mining could attract investments worth US$16 billion in the next few years, provided favourable policies are put in place.

By The Herald