(NEWZIMBABWE) Mining taxes top US$311 million

Mining taxes top US$311 million
11/05/2012 00:00:00
by Business Reporter

OVERALL tax paid by the mining sector is estimated around US$311 million, representing about 12 percent of the US$2,6 billion revenue collected in 2011, Chamber of Mines President Winston Chitando has said.

Speaking at the Chamber of Mines AGM in Victoria Falls on Friday, Chitando said incorporating alluvial diamonds mined in the eastern Manicaland province would bump mining’s the contribution to about 18 percent.

"The contribution of the mining sector is expected to grow phenomenally to constitute between 20 percent and 25 percent of the total government revenue by 2016," he said.

"However, total tax paid to government currently consumes approximately 17 percent of mining industry revenue and 60 percent of the sector's profitability."

Credited with helping drive the country’s recovery from a decade-long recession, the mining sector now dominates foreign exchange generation with exports increasing significantly from 20 percent between 1993 and 2003 to 43 percent between 2004 and 2011.

"In 2011 alone the sector contributed US$2,1 billion to national exports, representing 50 percent of the country's total foreign exchange earnings,” Chitando said.

"Output over the same period is estimated to account for 13 percent of GDP with indirect multiplier effects taking the contribution to about 18,4 percent of GDP in total. The indirect multiplier effects include backward linkages such as transport, suppliers and professional services.”

The Chamber also said a regional analysis had revealed that the contribution of the mining sector to GDP for Zimbabwe was comparable to that of Tanzania, South Africa, Namibia and Zambia.

"In fact the contribution of the mining sector in Zimbabwe to GDP is higher than the Sadc region average and that of more diversified economies such as South Africa and Namibia," Chitando said.