Great Dyke Investments’ tax exemption challenged again

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Nyasha Dube

FINANCE and Economic Development minister Mthuli Ncube has been taken to court for the second time for recently granting a tax exemption to a RussiaZimbabwe platinum mining venture, Great Dyke Investments.

Centre for Natural Resources Governance (CNRG) and Transparency International Zimbabwe (TIZ) have filed an urgent chamber application at the High Court seeking to have the tax exemption granted to Great Dyke set aside.

This is the second application made at the High Court after Bulawayo-based lawyer Dumisani Dube filed an almost similar lawsuit earlier this month. In their application, CNRG and TIZ cited Ncube, Great Dyke Investments, the Zimbabwe Revenue Authority and the Parliament of Zimbabwe as respondents.

According to an affidavit by CNRG programmes manager Henry Nyapokoto, the decision to approach the court came after Ncube published Statutory Instrument 26/21 which exempts Great Dyke from paying income tax, resident shareholders tax and additional profits tax for a period of five years.

Nyapokoto noted that while Section 3(g) of the Income Tax Act does grant the minister of Finance the authority to exempt anyone with a government mining contract from paying taxes, it is imperfect as it does not specify the limits to that power or how the minister can exercise that discretion.

“Considering the above, the 1st applicant (Ncube) now turns to look at section 3g of the Income Act which gives the 1st respondent power to make subsidiary legislation to exempt anyone who he so elects and who has a mining contract with the government. The section begins and ends at that and nothing more.

“The Income Tax Act does not specify anything on how the minister is supposed to exercise that discretion. Section 3g of the Income Tax Act, therefore, is wanting in failing to specify the limits of that power, the nature and scope of the Statutory Instrument that may be made and the principles and standards applicable to the Statutory Instrument.

“This is especially worrying since this is an important matter involving the national fiscus and revenue collection.” the application read. Nyapokoto is also claiming that Statutory Instrument 26/2021 is biased and obstructive as it goes against Section 298 (1) (b) of the Constitution which states that the burden of taxation must be shared fairly.

“National revenue is for national development and the 1st respondent, in granting such a tax exemption for five years on such exhaustible resources has not acted reasonably. “The reasonability of such a venture is questionable and doubtful at a time when the government of Zimbabwe is currently dealing with the Covi-19 pandemic and there is every need of finances to combat the spread of this deadly virus.”

CNRG and TIZ are seeking an order that sets aside the decision by Ncube to exempt Great Dyke from paying taxes. The matter is yet to be set for hearing.

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