ZIMBABWE should put in place tax measures to reduce revenue loss from minerals through illicit financial outflows, delegates attending a debt seminar heard yesterday. Addressing delegates at a workshop on debt, extractives and illicit outflows organised by the Zimbabwe Coalition on Debt and Development in Harare yesterday, African Forum and Network on Debt and Development policy officer for economic governance Mr Tafadzwa Chikumbu said fiscal transparency and improved taxation systems among other measures were critical in curbing huge losses.
Zimbabwe Environmental Law Association projects co-ordinator, Mr Gilbert Makore said tax collection was critical in mitigating illicit outflows the extractive sector.
A study undertaken by a research firm, Global Financial Integrity, revealed that Zimbabwe could have lost US$12 billion in the past 30 years through illegal financial outflows that include secret financial deals, tax avoidance and illegal commercial activities.
“According to the Global Financial Integrity, almost US$12 billion was lost in the past three decades mainly because of corruption activities that include tax avoidance and evasion and other illegal commercial transactions. This therefore calls for the need to promote fiscal transparency, unitary taxation, capital repatriation schemes and close monitoring of multi-national corporates that operate in the country who might take advantage of loopholes in the tax system to either evade or avoid paying taxes,” said Mr Chikumbu.
Public disclosure of financial information was also critical to curb economic corruption while there was need to enter into automatic exchange of information agreements with destination countries where the proceeds of tax evasion are lodged. Mr Makore said the Zimbabwe Revenue Authority should be fully resourced to monitor those licensed to carry out mining activities in terms of “lawfully” paying taxes to the Government.
“To make sure the Government is able to improve its revenue base, it is also critical to improve the tax administration capacity while creating competitive advantage enablers for value addition especially in the mining sector which is the backbone for the successful implementation of government’s economic blue-print, the Zimbabwe Agenda for sustainable socio-economic transformation,” he said.
The delegates also recommended the need for tax harmonisation and regional integration by joining the African Tax Administrators forum launched in Uganda in 2009 and criminalising tax evasion to ensure culprits are prosecuted. Mr Chikumbu said the illicit financial outflows was reducing the Government’s tax revenue base which affects the economy by aggravating trade dependency and negatively impacts on economic growth.