Zim Introduces Capital Gains Tax on Mining Title Transfers
Zimbabwe enacted the Finance Act 2024 Act 13 of 2023, introducing a 20% capital gains tax on mining title transfers.
This new tax regime, affects both domestic and international transactions, prompting concerns among stakeholders.
The Finance Act mandates that stakeholders comply with the new tax requirements by April 1, 2024, for transfers conducted before January 1, 2024. Subsequent transactions must adhere to the tax regulations within 30 days of their occurrence.
The introduction of the capital gains tax marks a significant shift in Zimbabwe’s fiscal policy concerning its lucrative mining industry. While the government aims to increase revenue streams and ensure a fair contribution from mining activities, critics argue that the nature of the tax places undue financial burdens on stakeholders and may deter future investments.
Transfer of mining rights
- No transfer of mining rights shall be approved without payment of capital gains tax and stamp duty or any other tax due on the value of the transaction.
- Failure to abide by this condition shall render the disposal or lease of mining rights null and void. 20.
Collection of tax on gross proceeds of granite and lithium
- A 1% levy was introduced on gross proceeds of lithium, black granite and other cut or uncut dimensional stones and quarry stones. This applies on local sales and exports.
- The funds will be ring-fenced for community development.
Notification of the Intention to Transfer or Lease Mining Rights
All agreements for the transfer or disposal or lease of mining rights be lodged with the State and reviewed and approved before they are implemented.
Collection of mining royalties in kind
- The Minister may appoint any of the following as agents for the collection of royalties’ payable in kind: a) Minerals Marketing Authority of Zimbabwe. b) Reserve Bank of Zimbabwe. c) Fidelity Printers. d) Any other person as the Minister may designate.