Government Makes Gold Sales to Fidelity VAT-Free
Finance Minister Prof. Mthuli Ncube has announced new regulations that make the sale of gold to Fidelity Gold Refinery (FGR) exempt from value-added tax (VAT). These changes are outlined in Statutory Instrument 105 of 2024, under the Value Added Tax Act.
By Rudairo Mapuranga
The new rules are part of the Value Added Tax (General) (Amendment) Regulations, 2024 (No. 69), which introduce a zero-rating for gold sales to the refinery. Zero-rated goods are products that are exempt from VAT, meaning no tax is added to their sale.
According to a newly released Statutory Instrument (SI) 105 of 2024 “Second Schedule (Section 13)
“ZERO RATE: SUPPLY OF GOLD TO FIDELITY GOLD REFINERY (PRIVATE) LIMITED
1. Supply of gold to Fidelity Gold Refinery (Private) Limited.” says the SI.
This exemption is significant because zero-rated goods, like gold in this case, play a crucial role in the production of other goods and are essential in the broader supply chain.
Typically, countries require VAT on most goods and services sold domestically. VAT is a type of consumption tax that is included in the total price of products and is charged in addition to sales tax in many transactions.
The decision to zero-rate gold sales follows a recent increase in Zimbabwe’s VAT rate from 12% to 15%, which faced opposition from many quarters.
VAT is an indirect tax applied to the consumption of goods and services. It is charged on transactions and the importation of goods, with the main legislation being the Value Added Tax Act (Chapter 23:12).