BREAKING: Miners to now remit royalties to ZIMRA
The Zimbabwe Revenue Authority (ZIMRA) has advised miners and Mining companies to cease with immediate effect, remitting mining royalties to the Reserve Bank of Zimbabwe (RBZ) and remit to ZIMRA Commissioner General in compliance with the country’s mining and financial laws.
Rudairo Mapuranga
A mining royalty is a sovereign right to receive payment based on a percentage of the value of the mineral exported.
In Zimbabwe, mineral resources are taxed at varying percentages payable in different thresholds from the local currency, forex and in kind.
Last year, Finance Minister Mthuli Ncube requested mining companies to pay up to half of their royalties in local currency marking a u-turn on a 2020 decision requiring mining companies to pay the tax only in foreign currency, with President Emmerson Dambudzo Mnangagwa later on stating that companies will pay royalties to the government in the form of minerals (in kind) as a percentage of the mined resources.
According to a Public Notice released by ZIMRA, Royalties for platinum, palladium and lithium will be collected as 40 per cent in RTGS with the remaining 60 per cent in USD. Royalties for gold, diamonds and precious stones will be paid 40 per cent RTGS, 10 per cent foreign currency and 50 per cent in kind. And for all other minerals, it will be 50 per cent RTGS and 50 per cent foreign currency.
The following is the notice released by the revenue collection agency
“The Commissioner General of Zimbabwe Revenue Authority (ZIMRA) wishes to advise all mineral exporters and Financial Institutions of the following payment arrangements for mineral royalties with effect from 1 August 2023 until further notice:
“1. Any taxpayers that were remitting mining royalties to the Reserve Bank of Zimbabwe should cease doing so and remit the mining royalties to the Commissioner General in compliance with the Revenue Authority Act [Chp.23.11], Mines and Minerals Act [Chp 21.05] and the Finance Act [Chp. 23.04].
“2. Any correspondence already issued regarding payment of mining royalties in kind that contradicts the provisions of the Revenue Authority Act [Chp.23.11], Mines Minerals Act [Chp 21.05], and the Finance Act [Chp. 23.04] is not valid and not enforceable.
“3. The interim payment arrangements for royalties in kind are aimed at absorbing challenges being faced by taxpayers to account for the royalties in full and in kind.
“4. When remitting the Royalties, the Financial Institutions shall be required to prepare and submit a schedule of payments made to ZIMRA on or before the 10th day of the month following the month in which they were deducted.
“5. The mineral exporters (mining companies or persons) shall be required to complete the return Rev 5Cs in USD and ZWL respectively and submit it to ZIMRA on or before the 10th day of the month following the month in which they were deducted.
“6. Further guidance shall be provided in due course on the handling of royalties collected in kind.
“For any further clarification, kindly contact your nearest ZIMRA office,” It reads in part.