Parly hails GDI tax holiday
Parliament has hailed the decision by Government to grant a tax holiday to Great Dyke Investments (GDI) saying this is a strategic intervention which has the potential to unlock mining sector potential.
GDI, in partnership with Kuvimba Mining House, are developing a platinum mine in Mashonaland West province which is expected to boost Zimbabwe’s global standing in the platinum group metals industry.
To this end, Finance and Economic Development Minister Professor Mthuli Ncube last week granted the project a five year tax holiday through Statutory Instrument (SI) 26 of 2021.
Reacting to the tax relief, Parliamentary Portifolio Committee on Mines and Mining Development chairperson Edmond Mkaratigwa said the relief means Government was looking at the bigger picture.
While Government heavily relies on tax for sustainance, Honourable Mkaratigwa said such a holiday is a shrewd “give and take” strategy.
“Sometimes it’s not only the immediate revenue from tax accruals that should inform policy,” said Honourable Mkaratigwa. Mining is a powerful industry with the potential to transform the economy and it is not a coincidence that His Excellency (the President) has set it as the anchor in reviving our economy.
“To achieve this envisaged growth, we obviously need investment from both local and international capital.
“But we are in difficult times occasioned by Covid-19 which has weighed down businesses and investors might be tempted to slow down on new frontiers which are at development stage as is the case with most projects in Zimbabwe.
“So what a tax holiday does is to defend such an investment and you won’t see anyone pulling out. Even in the eyes of other would be investors, the country is sure to earn some credit,” he said.
Mr Mkaratigwa said while Government might take stick today, reality on the ground is that it’s decision means hundreds of employees have had their jobs safeguarded and thus huge economic benefit to the economy.
However, Mr Mkaratigwa cautioned that in future the relevant arms of Government need to take such interventions through Parliament and any other open consultative forums to promote accountability and transparency as well as fending off conspiracy theorists.
In an earlier interview, GDI vice chairperson Igor Higer told our sister publication, The Herald Finance and Business, that the tax relief was a culmination of a promise that had been made to Russia.
He said its fulfillment is a sign that Zimbabwe honours its promises to investors and that capital will feel comfortable in the country.
“The SI was issued based on a signed
mining agreement, which was signed in Moscow in the presence of President Putin and His Excellency President
Mnangagwa (in 2019),” said Mr Higer.
“So from an investor point of view, the most important thing here is the stability and the evidence that when the Government of Zimbabwe promises something, they deliver.
“So obviously this gives us the comfort to continue investing in the country and to develop the project as per
Government also has a stake in the Darwendale Platinum Project through Kuvimba Mining House which the state owns in partnership with a consortium of investors.