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Lawyer sues govt over GDI tax exemption

Jeffrey Muvundusi
in BULAWAYO

A BULAWAYO-BASED lawyer has filed an urgent chamber application before the High Court which seeks to nullify the government’s statutory instrument which exempts Great Dyke Investment (GDI) from paying tax.

In the application, Dumisani Dube through his lawyers from Tanaka Law Chambers wants the court to strike of Statutory Instrument 26 of 2021 that was proclaimed by Finance minister Mthuli Ncube on January 27.

GDI, a joint venture between Russia’s Vi Holdings and Zimbabwe’s Landela Mining Venture (Pvt) Limited, will not be obliged to pay taxes at their Darwendale platinum mine, according to the legislation.

According to Dube’s founding affidavit, the application is premised on the position that the law in question violates fundamental rights enshrined in the declaration of rights in the national Constitution.

“Section 56(1) of the Constitution provides that all persons (natural and juristic) are equal before the law and have the right to equal protection and benefit of the law. The said right is a fundamental one entrenched in the declaration of rights.

“By proclaiming S.I 26 of 2021, first respondent (Ncube) has used the law to render an undue benefit to second respondent.

“This is so as S.I 26 of 2021 has the effect of exempting second respondent from its tax obligations whilst other taxpayers, including the general public, continue to be saddled with the same,” Dube said in his application.

He further noted that the decision by Ncube had far-reaching consequences as it was against the Constitution which states that the “burden of taxation must be shared fairly”.

“Section 298(1)(b) makes it clear that national development is anchored on public finance. As already stated above, taxes, including those generated from income tax, constitute a substantial portion of the national revenue, which is then channelled towards national development.

“In that vein, it becomes clear that the decision by the first respondent to afford the second respondent an undue tax exemption, affects the nation’s general populace,” he said.

“Taxation on dividends realised from the same operations have also been exempted from taxation. Again, the law has been weaponised to unduly benefit the second respondent and its shareholders.”

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