Business / Companies
Zim govt issues a $28 million garnishee order against Zimplats
09 Jan 2012 at 14:34hrs | Views
The government has issued a US$28 million garnishee order against Zimplats to recover outstanding royalties, the state-controlled Herald newspaper reported on Monday.
"So far, over US$7 million has been deducted from the mining firm's bank accounts as a result of the Zimbabwe Revenue Authority (Zimra) order," said the local daily.
The order was served on Stanbic Bank on November 16 last year and five days later, the bank had remitted to the Zimbabwean government some US$7million from Zimplats' accounts, the Herald added.
Zimplats, however, was contesting the order.
"The mining giant lost its bid to have the High Court urgently quash the garnishee order and force Zimra to return funds already deducted. High Court judge Justice Francis Bere ruled that the matter was not urgent. It will now be pursued as a normal court application."
Zimbabwean law requires that all miners remit royalties to government.
"Royalties are set as a percentage of gross production, regardless of profits, and are premised on the Government of Zimbabwe owning all the mineral rights, having bought them off the BSA Company in the 1930s. Other taxes are profit-based," the Herald explained.
According to Zimra, when the Ministry of Finance took over the setting of royalties in 2009, rates rose from 2.5% to 3.5%.
In 2010, Zimra argued, the rates were increased to 5%, but Zimplats allegedly continued to remit royalties using the old rate of 2.5%.
With effect from this month, the rate of mining royalties increased to 10%.
"In the court papers, Zimplats chief finance officer Patrick Museva-Shayawabaya argued that Zimra acted unlawfully when it issued the garnishee order, adding that the figure of US$28 million was still in dispute," the Herald said.
"So far, over US$7 million has been deducted from the mining firm's bank accounts as a result of the Zimbabwe Revenue Authority (Zimra) order," said the local daily.
The order was served on Stanbic Bank on November 16 last year and five days later, the bank had remitted to the Zimbabwean government some US$7million from Zimplats' accounts, the Herald added.
Zimplats, however, was contesting the order.
"The mining giant lost its bid to have the High Court urgently quash the garnishee order and force Zimra to return funds already deducted. High Court judge Justice Francis Bere ruled that the matter was not urgent. It will now be pursued as a normal court application."
Zimbabwean law requires that all miners remit royalties to government.
"Royalties are set as a percentage of gross production, regardless of profits, and are premised on the Government of Zimbabwe owning all the mineral rights, having bought them off the BSA Company in the 1930s. Other taxes are profit-based," the Herald explained.
According to Zimra, when the Ministry of Finance took over the setting of royalties in 2009, rates rose from 2.5% to 3.5%.
In 2010, Zimra argued, the rates were increased to 5%, but Zimplats allegedly continued to remit royalties using the old rate of 2.5%.
With effect from this month, the rate of mining royalties increased to 10%.
"In the court papers, Zimplats chief finance officer Patrick Museva-Shayawabaya argued that Zimra acted unlawfully when it issued the garnishee order, adding that the figure of US$28 million was still in dispute," the Herald said.
Source - I-Net Bridge
