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Great Dyke Investments' half decade tax holiday challenged

by Staff reporter
06 Feb 2021 at 07:07hrs | Views
DARWENDALE platinum miner, Great Dyke Investments' five-year tax reprieve granted by government recently, now hangs in the balance following an urgent chamber application filed against the controversial policy directive.

The mining entity is a joint venture between Russia's Vi Holdings and Zimbabwe's Landela Mining Venture (Pvt) Limited and is investing US$3 billion into the platinum project.

In a directive published in the Government Extraordinary Gazette dated January 27, 2021, Finance Minister Mthuli Ncube, granted the exemption in terms of the Income Tax Act (Chapter 23:06).

For the next half decade, the platinum miner will not be obligated to pay tax from mining operations and sales of mining output; and resident shareholders' tax payable on dividends paid to shareholders.

In addition, profits tax for a period of five years commencing from the date of receipt of income from mining operations and sales of output payable in respect of the special mining lease area for any year of assessment, will also be exempt.

However, Zimbabwe Lawyers for Human Rights (ZLHR), in an update Friday, said lawyers had been dispatched to assist an applicant who is seeking an order to suspend SI 26/2021.

"On behalf of the applicant, ZLHR argues that exemption of Great Dyke Investments Pvt Ltd from paying taxes is unconstitutional, it violates the right to equal protection of the law.

"SI 26/2021 which grants the permission also violates section 298(1) of National Constitution on principles of public finance management and section 298(1)(b)(i) on burden of taxation that must be shared equal," said ZLHR.

The development comes at a time when GDI recently announced that the African Export-Import Bank (AfreximBank) completed a due diligence study for the platinum project, paving way for the regional financier to proceed with a US$500 million syndicated funding programme.

Towards the end of last year, GDI announced that over US$25 million had been spent in the development of the mines and a total of US$110 million had been invested.

Source - newzimbabwe

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