The Mbada mining firm, which has been operating at the Chiadzwa diamond fields since 2008, has said it is not at fault for the non-payment of millions of dollars in tax.
The Zimbabwe Revenue Authority (Zimra) has ordered the firm to pay a portion of its tax debt, issuing a garnishee order for $22.4 million. This is the second such order on Mbada accounts at BancABC in four months.
The company has allegedly been withholding tax it accrued during transactions with a contractor called Gecko. A previous garnishee order issued by Zimra last year, to the tune of over $5 million, was cancelled shortly after it was issued.
Mbada has not denied the tax liability, passing the buck instead to the ‘highest level’ of government. According to a report in the NewsDay newspaper, the diamond firm said that there was an agreement that the companies had paid their taxes in advance “after they chipped in with cash for civil servants’ salaries.”
According to a March letter from the national Treasury to Zimra, and published by NewsDay, “government, through the Ministry of Mines and Mining Development, directed that diamond mining houses where government has a shareholding should remit advance dividends in order to mitigate cashflow challenges.”
The letter, signed by Finance and Economic Development secretary Willard Manungo and addressed to Zimra commissioner-general GershemPasi, said that three mining companies, including Mbada, had directly paid over $197 million to the cash-strapped government last year towards civil servants’ salaries.
This is a complete contradiction of the claims made previously by government ministers that Chiadzwa diamonds were not benefitting the state in anyway. Finance Minister Patrick Chinamasa said late last year that out of a targeted $40 million expected from diamond sales in 2013, nothing had been received by the Treasury. Chinamasa’s predecessor, TendaiBiti, meanwhile repeatedly stated during his tenure that no money was forthcoming from the diamond mining firms.