Amendments to Zimbabwe's Mining Tax Regime

Country / jurisdiction: Zimbabwe · Year: 2024 · Status: In force · Level: National · Type: Voluntary

Recent amendments to Zimbabwe's tax regime began with the Finance Act, 2023 , which introduced significant changes to income tax, value-added tax, customs and excise duties, and capital gains tax. The Finance Act of 2023 introduced a special capital gains tax on entities acquiring a mining title or any interest therein. The tax is payable in United States dollars at the rate of 20% of the value of the transaction concerned by the transferee entity. No mining title can be transferred unless the tax has been paid.

The Finance Act of 2023 also introduced a levy of 1% of the gross value of the sale within Zimbabwe or the export of lithium, black granite, quarry stones and dimensional stones.

Zimbabwe's Finance (No. 2) Act, 2024 amends and builds upon the provisions established by the Finance Act, 2023 by introducing several key changes to the tax regime that are designed to enhance revenue collection, improve tax compliance, and support the country's efforts to maximise the potential of its mineral resources.

These key changes on taxes include:

Introduction of a 2% levy on the gross value of domestic and for-export sales of lithium, black granite, quarry stones and dimensional stones.

Introduction of a mining royalties tax deducted at source, with rates determined by the Thirty-Seventh Schedule

Penalties imposed for late remittance of royalties.

Special provisions for capital gains tax, particularly targeting the sale or transfer of mining assets beginning 1 January 2024

The Act also mandates that mining entities must register with the Zimbabwe Revenue Authority (ZIMRA) before acquiring or transferring mining titles. This requirement aims to ensure compliance with tax obligations prior to the grant of mining rights.

To increase transparency, the definitions of "beneficial owner" and "controller" are expanded to include entities or individuals who exercise significant control, direct or indirect, over a mining entity.

The Act encourages local processing and value addition to minerals before export, promoting local beneficiation within Zimbabwe's mining sector.

Official source: https://www.jsc.org.zw/upload/Gazette/Act%20No.%207%20of%202024,%20Finance%20(No.%202).pdf