Shortfall in Cash to Govt, Say Zimbabwe Legislators

Illegal diamond diggers in the Marange area.

(IDEX Online News) – A Zimbabwean parliamentary committee has found wide-scale differences between the transfers of money claimed by diamond producing firms and the amounts actually received by the government.

Following a three-year investigation into the diamond producers working in the Marange area, a Mines and Energy committee found that the state had not received any significant contributions from the diamond sector, and that despite rises in production and revenues, according to a report in The Standard.

A total of 12 million carats worth $563.5 million exported in 2012, up significantly from the 8.7 million carats worth $233.7 million exported in 2011.

The committee, chaired by Edward Chindori-Chininga, noted that formal operations began in Marange in 2009 with two companies operating, Mbada Diamonds and Canadile Miners.

“In January 2010, Mbada Diamonds attempted to auction its diamonds, in violation of both national and international law. The aborted diamond auction sale opened a Pandora’s box, revealing several irregularities and loopholes in the entire diamond value chain,” the committee reported.

It also noted that Mbada Diamonds displayed a “big brother” attitude, meaning that some government bodies were powerless to question the firm's decisions.

The committee recommended that the Ministry of Finance propose a comprehensive taxation law to address some of the taxation discrepancies in the mining sector and which would also result in higher revenues to the government.