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Fiscal incentives or tax policies for Mining investment in Zimbabwe



Fiscal incentives or tax policies for Mining investment in Zimbabwe

Govt offers tax breaks to companies that invest in local procurement, beneficiation

The Zimbabwean tax regulations concerning income tax, allowable deductions, and exemptions are outlined with clarity Minister of Mines and Mining Development Hon Zhemu Soda has said.

According to the Minister, all capital expenditure related to mining operations is deductible, while assessed losses can be carried forward indefinitely.

Soda said Holders of Special Mining Leases are subject to a 15% corporate income tax rate, with additional profit tax triggered upon reaching specified profitability levels. Moreover, exemptions from certain taxes are possible for approved holders of Special Mining Leases.

He explained that in terms of customs duty, rebates are granted for goods used in prospecting, petroleum exploration, and specific mine development operations. Additionally, VAT deferment is available for mining companies on capital imports for a defined period, subject to set conditions.

To address infrastructure challenges like power supply and transportation hindering mining operations and investment, the Minister said the Zimbabwean government is implementing various strategies.

These include the introduction of solar power plants at mining project sites, such as Blanket Mine, which generates a significant portion of its power needs from solar energy. Additionally, plans to invest in coal-bed methane gas projects for power generation are underway. The government has also introduced Third-Party Access to the national grid, allowing investors to produce and sell power using existing infrastructure. Furthermore, Zhemu said mining companies have the option to directly import power from neighboring countries. These initiatives aim to enhance energy reliability and support sustainable mining operations in Zimbabwe.

Responding to mining Zimbabwe’s question “What fiscal incentives or tax policies do we have in place to encourage mining investment and ensure a competitive environment for foreign companies seeking to invest in Zimbabwe?” this is what the Minister of Mines and Mining Development said.


Allowable Deductions/ Expenditure

  • All capital expenditure on exploration, development and operations incurred wholly and exclusively for any mining operations is allowed in full for taxation purposes.
  • 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 may be allowed in full unless the taxpayer elects to carry the expenditure forward and allowed against income from mining operations in subsequent years.

Assessed Losses

  • There is no restriction on the carryover of tax losses; these can be carried forward for an indefinite period.

Taxable income of a Holder of Special Mining Lease

  • In the case of a holder of a Special Mining Lease, corporate income is taxed at a rate of 15%.
  • However, holders of a Special Mining Lease are liable to Additional Profit Tax. 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.
    • Rebate of duty on goods for 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.

See Also
President of Zimbabwe

  • 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.

  • 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:

A customs duty suspension is granted to a holder of a mining location number importing specified goods during the project’s life cycle for machinery, construction and erection of facilities for the production and conveyance of minerals.

    • VAT deferment is granted to mining companies on capital imported for a period of 120 days subject to the conditions set by the Commissioner-General.


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