Zim pushes for MNC’s audit

(Last Updated On: November 18, 2020)


The country’s anti-graft body, the Zimbabwe Anti-Corruption Commission (Zacc), is pushing for an extensive audit of international mining companies operating in Zimbabwe, following suspicion of tax evasion through underdeclaration of export receipts and looting, Business Times can report.

This, Zacc indicated, may constitute massive externalisation, meaning the government could be losing millions of dollars in potential revenue.

In its latest report on the impact of corruption in the mining sector, which was presented by University of Zimbabwe economics lecturer, Albert Makochekanwa, at a Zacc meeting held in the capital this week, the anti-graft body recommended the immediate appointment of international audit firms to investigate operations of international mining firms operating in Zimbabwe.

International audit firms have units that cover mining issues. Some of the prominent multinational mining companies operating in Zimbabwe are Zimplats, Mimosa, Unki Mine, Caledonia Mining Corporation, Vast Resources and Prospect Resources.

“There is a need for the government to engage multinational auditors to audit the operations of international (mining) companies operating in Zimbabwe because there have been allegations of under-declaration of export receipts and tax evasion in the sector,” Makochekanwa said.

“We believe the Auditor General Mildred Chiri has done a lot in exposing the rot within State enterprises but now there is a need to audit those international mining companies using international audit firms that have specialised units to cover mining issues.”

Centre for Natural Resource Governance spokesperson Simiso Mlevu lauded by move by Zacc, adding that its implementation was key.

“…It would work best if top government officials were not involved in the extractives sector transnational organised crime.

With the high level of involvement of government officials in illegal mining and smuggling, the report will simply be swept under the carpet, and no action will be taken,” Mlevu said.

Reports say Africa is losing US$50bn annually through illicit financial flows.

According to the Reserve Bank of Zimbabwe (RBZ) an estimated US$3bn was externalised between 2015 and 2017 to countries such as Mauritius, Botswana and the Far East.

These figures are actually said to be understated where it is believed that of the US$3bln, about US$1,8bln was spirited away illegally, while the balance was expatriated through management fees, service fees, technical fees and royalties which are in essence part of illicit flows according to the definition.

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