The Zimbabwe Revenue Authority (Zimra) is working on tightening revenue collection measures to ensure the small-scale mining sector does not prejudice the country through tax evasion.
Zimra chief investigations officer Siyathaba Muremba told a recent Zimbabwe Environmental Law Association workshop in Harare there was need to curb leakages from the small-scale mining sector.
Although Muremba could not quantify how much the country was losing, it is understood millions of dollars in potential revenue was lost as some small-scale miners knowingly evaded the tax while others were ignorant of the procedures.
Most of small-to-medium enterprises do not register. As soon as they register their companies they forget Zimra, said Muremba.
Compliance in general is submissive to tax, people dont want to pay but for some, its out of ignorance.
There are no proper Zimra records of some miners supplying gold and diamonds on the informal market, he added.
The legislation on mines income tax for corporates should be: on Pay As You Earn, taxable income is pegged at 25% while only employees earning $250 or more including benefits will be taxed.
Muremba said: On related party transactions and dealings, there is abuse of international transfer pricing where in the transport industry a company doesnt invoice a customer in Zimbabwe when an order comes from Sadc, but a company in another country and much of the money goes untaxed.
He said the country was also losing revenue through expatriate employees who should be taxable when services are rendered in Zimbabwe.
An expatriate employee is earning $400 in Zimbabwe,(but) is earning $2000 in their country of origin because they have designed a system where only the residential earnings are taxed, said Muremba.
Muremba said measures were being put in place to reduce revenue leakages in other sectors of the economy.