Taxable Income of a Holder of Special Mining Lease
A holder of a special mining lease, corporate income is taxed at a special rate of 15% instead of the general tax rate of 25%.
However, holders of a Special Mining Lease are liable to Additional Profits Tax (APT). The tax is payable upon attaining a formula based level of profitability.
Exemption from Certain Taxes
After consultation with the Minister responsible for the administration of the Mines and Minerals Act, the Minister of Finance may declare the holder of a Special Mining Lease to be an approved holder of a special mining lease for the purposes of exemption, wholly or partly, from the following taxes:
Non-Residents shareholders tax;
Non-Residents tax on Fees;
Non-Residents tax on Remittances;
Non-Residents tax on Royalties
Allowable Deductions/ Expenditure
Deductions on all capital expenditure on exploration, development, and operations incurred wholly and exclusively for any mining operations are allowed in full.
Expenditure incurred during a year of assessment on surveys, boreholes, trenches, pits and other prospecting and exploratory works undertaken for the purpose of acquiring rights to mine minerals in Zimbabwe or incurred on a mining location in Zimbabwe, together with any other expenditure that is incidental thereto. The taxpayer may elect to have the expenditure allowed in the year of assessment in which it is incurred or carried forward and allowed against income from mining operations in any subsequent year of assessment.
There is no restriction on carryover of tax losses; these can be carried forward for an indefinite period.
Royalty on Gold for Small Scale Miners
In order to support this sector, Government levied a lower rate of royalty of 1% on small scale gold producers whose output does not exceed 0.5 kg per month.
Support for Small Scale Miners
The capital-intensive nature of mining activities poses challenges to operations of many small-scale miners. This is notwithstanding that; small-scale mining activities employ many people in the country.
In order to encourage the participation of financial institutions in supporting small scale mining activity, Government has put in place tax incentives for financial institutions who accept geologically surveyed claims as collateral for small scale miners’ borrowing requirements
Rebate of duty on goods for the prospecting and search for mineral deposits-: Rebate of duty is granted on goods which are imported by a person who has entered into a contract with the Government for the prospecting and search for mineral deposits.
Rebate of duty on goods imported in terms of an agreement entered into pursuant to a special mining lease: Rebate of duty is granted on goods which the Secretary for Mines certifies as eligible for a rebate of duty in terms of an agreement in the special mining lease.
Suspension of duty on goods imported for specific mine development operations: Customs duty suspension is granted to a holder of a mining location importing specified goods during the project’s life cycle for mining development operations such as sinking shafts, installation of machinery, construction and erection of facilities for the production and conveyance of minerals.
Deferment of Value Added Tax: VAT deferment is granted to mining companies on capital equipment imported for a period of ninety days subject to the conditions set by ZIMRA Commissioner-General.
Rebate of duty on goods for use in petroleum exploration or production: Rebate of duty is granted to the grantee of a special grant issued under the Mines and Minerals Act authorizing the exploration or production of petroleum.