In an era of rising global economic inequality and shifting geopolitics, a central debate continues to be amplified: are large corporations, particularly in extractive industries and finance, paying their fair share of taxes?
This debate matters deeply in Africa, where economies remain heavily dependent on foreign direct iinvestment (FDI).
Multinational mining firms, banks, and conglomerates from both east and west strike deals that erode tax justice, secure privileges, and push risks onto local entities while widening inequality.
At the heart of Africa’s political economy lies a contradiction: nations rich in natural resources often remain trapped in poverty, characterised by unstable government revenue and weak public institutions.
Instead of financing inclusive development, resource rents are siphoned off by elites and foreign corporations.
The African Tax Administration Forum’s 2022 African Tax Outlook report warns that most African states lose billions in mineral revenues every year because outdated tax regimes leave loopholes wide open, allowing wealth to leak out unchecked.
Zimbabwe’s endowment of highly sought-after green minerals, such as lithium, is central to this discussion.
Critics argue that the country's current tax system allows major corporations, including multinational mining companies and financial institutions, to generate significant profits while contributing a disproportionately low amount to the national economy.
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Compounding this injustice, these large enterprises have significantly exploited the environment, destroyed local ecosystems, and caused multiple socioeconomic challenges, including health issues and the displacement of citizens.
Illicit Financial Flows (IFFs) put hard numbers on the scale of this injustice. Africa as a whole loses US$88.6 billion annually, equivalent to 3.7% of the continent’s GDP (UNCTAD, 2020).
However, Zimbabwe’s case is even more alarming: between 2000 and 2020, the country lost over US$32 billion through illicit financial flows, a figure larger than its total external debt obligations (Veritas Zimbabwe, 2022).
Between 2009 and 2013 alone, US$2.83 billion was lost to IFFs, with 97.9% of that leakage linked to the mining sector (Africa Portal, 2023).
These figures reveal a painful reality: tax avoidance, generous tax holidays, and illicit flows are not marginal issues, but systemic drains on sovereignty and public welfare.
Beyond simple tax avoidance, the way conglomerates manage liability shows an imbalance of shifting risks locally while keeping control and profits abroad.
Extraction is increasingly carried out through ‘indigenous partners’ or local companies with local directors.
However, these are often shell companies where real control and profits remain abroad, while the local entities absorb the operational risks, environmental backlash, and community hostility.
This allows global capital to ‘localise liability while internationalising profit’.
When communities are displaced or rivers are polluted, the local proxy is often blamed and carries responsibility, but accountability rarely reaches the multinational boardrooms in London or Beijing.
This injustice is gendered. Women, particularly those living in rural areas, bear the unpaid costs of extractivism by walking further for water when rivers are polluted, caring for the sick when mining causes illness, and sustaining families uprooted by displacement.
The current tax system ignores these externalities, forcing women and communities to subsidise corporate profits, a mechanism through which tax injustice intensifies climate and gender injustice.
Civil society has consistently raised these concerns. Groups like the Zimbabwe Environmental Law Organisation (Zelo) have documented how weak mining agreements and excessive tax incentives deprive citizens of their rightful share of mineral wealth.
Meanwhile, the Tax Justice Network–Africa (TJN-A) shows that Africa loses more to tax dodging than it receives in aid. This has led to widespread calls for a more progressive and strategic tax regime.
The strategic solution, articulated by tax justice proponents like Murphy (2019), suggests the debate should not focus on imposing complex, new 'wealth taxes'.
Instead, it should be about taxing wealth flows, the income derived from wealth, including dividends, rents, capital gains, and corporate profits, by adjusting existing tax rates and closing loopholes.
Applied to Zimbabwe, this means taxing the actual flows of wealth, such as mining profits, bank dividends, and speculative financial gains. This approach aligns with the view that Africa’s financial crisis stems from the inefficient use of its resources, rather than a lack thereof.
The justification for this reform is twofold:
- Redistribution: Taxing wealth reduces inequality by shifting resources from those with excess to those with none, thereby stimulating demand.
In Zimbabwe, where wage earners are taxed at source but corporations negotiate away their obligations, this would rebalance a profound injustice.
2 Revenue and Sovereignty: The Zimbabwe government cannot provide public goods without recovering money from those who profit most.
Progressive taxation is a claim to sovereignty, essential for building the fiscal capacity to fund the nation's own development.
Across Africa and beyond, other countries provide useful lessons on taxing wealth, income, and resource rents more effectively, even if their systems are not perfect.
Botswana’s diamond taxation model enabled the state to capture significant rents through its joint venture with De Beers, channelling revenues into health, education, and infrastructure and securing decades of relative stability and development (Good, 2008).
Namibia has combined royalties, corporate income tax, and additional profit levies to secure fairer returns from its mining sector, while Tanzania, especially under late president John Magufuli, demonstrated that political will can compel multinationals to renegotiate contracts, reduce exemptions, and repay billions in avoided taxes.
South Africa’s SARS remains one of the continent’s strongest tax administrations, even as inequality persists.
Globally, Norway is considered the benchmark, taxing oil and gas profits at 78% and saving revenues in a sovereign wealth fund now worth over US$ 1.6 trillion, while Chile uses progressive royalties on copper tied to global prices, and Australia attempted a mineral resource rent tax on coal and iron ore super-profits.
None of these models is flawless, but they demonstrate that it is possible to capture greater value from natural resources and corporate wealth to fund public goods, reduce dependency, and strengthen sovereignty.
For Zimbabwe, the stakes are not just economic but also ecological, social, and cultural.
Mining has destroyed ecosystems, uprooted communities from their ancestral lands, and left lasting health crises, yet these damages are treated as invisible.
A just tax system must force corporations, banks, and mining giants to pay their share not only to raise revenue but to reclaim sovereignty, fight inequality, and repair the harm caused by extractivism.
With fair taxes from environmental levies to windfall taxes on mineral booms, Zimbabwe can fund a just green transition, strengthen public services, and show that the true wealth of the nation is its people, not its minerals.
If the tax system remains broken, the so-called green economy will only reproduce old injustices in new forms.
