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The 2022 National Budget: ZELA’s Key Asks

24 November 2021

Budget allocations to social service sectors

  • The 2022 National Budget should allocate resources to the health sector and the basic education sector in line with the 15% Abuja declaration and the 20% Dakar declaration, respectively.  

Proposed Tax Measures and Policies to increase domestic resource mobilisation

Strengthen measures to curb smuggling of minerals

  • The 2022 National Budget should allocate more resources towards government departments that monitor smuggling of minerals such as diamond and gold. These include the Minerals and Border Control Unit. 

Finalise the computerised mining cadastre system

  • The 2022 National Budget should avail adequate resources towards finalisation of the computerised mining cadastre system.
  • To improve resource mobilisation in the ASM sector, Government must consider integrating the computerised mining cadastre system into ZIMRA’s tax payers database.

Strengthen Tax Incentives Transparency and Accountability

  • The 2022 National Budget is expected to strengthen transparency and accountability in the awarding of tax incentives in the mining sector. It is also important for the National Budget to disclose revenue that is forgone through tax expenditures for public and parliamentary scrutiny.
  • The government must publicly the cost benefit analysis that is being done to ascertain whether the tax expenditures are achieving their intended objectives.

Strengthen Gold Export Incentives Transparency and Accountability

  • In June this year, the Reserve Bank of Zimbabwe introduced a new gold export incentive scheme in which gold producing companies which deliver gold quantities above their average monthly deliveries are entitled to a retention level of 80% on the incremental portion of the gold delivered to Fidelity Printers and Refiners (FPR).
  • To ensure transparency and accountability in line with Section 298 of the Constitution, it is critical for the 2022 National Budget to publish information relating to the names of the companies that have benefited from the gold export incentive scheme thus far and the extent to which the gold export incentives are fulfilling the intended objective of improving gold deliveries to FPR. 

Formalise the Artisanal and Small-Scale Mining (ASM) sector to improve domestic resources mobilisation

  • Government must urgently formalise the Artisanal and Small Scale Mining (ASM) to create an environment that allows its players to contribute more to the fiscus as well as facilitating their benefits from government programmes.
  • As part of the formalisation agenda and measures to improve tax compliance, the Government must undertake consultations, education and training programmes targeting this sector. Resources must be channelled towards these programmes.
  • Government must publicly disclose publicly information relating to the number of ASM players being registered and make follow ups to ensure that those registered ASM players are up to date with their tax obligations.
  •  More importantly, the overwhelming informality of the ASM in Zimbabwe requires comprehensive policy and legislative reforms in the sector. Government must quickly develop an ASM policy. The legality of the ASM sector must be addressed through the Mines Bill.

Budget support towards the ASM loan programmes

  • The government’s ASM loan programme is very key to the contribution of the sector to the achievement of the US$ 12 Billion Mining Strategy by 2023. To improve transparency and accountability, the Ministry of Mines and Mines Development’s quarterly performance reports should disclose information relating to the beneficiaries of the ASM loans and their impacts on gold production and delivery to FPR.

Other Supporting Mineral Governance Reforms

  • Expedite the enactment of the Mines and Mineral Amendment Bill to promote transparency and accountability.
  • There is an expectation that the government will include the EITI roadmap in the 2022 National Budget.
  • The 2022 National Budget is expected to disclose disaggregated information the contribution of mining to the fiscus for public scrutiny and parliament oversight.

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