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The Ministry of Finance and Investment Promotion has, in the 2026 National Budget, introduced a harmonised tiered royalty structure for gold and the Quoted Price Method for mineral exports. Both measures, which take effect in January 2026, are aimed at boosting mining revenues and closing long-standing loopholes, Mining Zimbabwe can report.
By Ryan Chigoche
Finance Minister Mthuli Ncube said these reforms are designed to seal gaps in the current tax regime, gaps he argues have been exploited by miners and have prevented the government from earning a fair share of revenue during periods of strong commodity prices, while investors reap the main benefits.
This development contradicts industry expectations. For years, miners through the Chamber of Mines Zimbabwe have lobbied for a reduction in taxes, arguing that the current effective rate of around 14% is already too high. However, in the 2026 budget, Ncube took the opposite view, describing the existing framework as too generous relative to industry earnings.
This debate comes at a time when mining revenue has been expanding rapidly, driven by the surge in gold prices and the rise of new minerals such as lithium.
Mining Gross Revenue grew from US$4.948 billion in 2023 to nearly US$6 billion in 2024, while fiscal contributions rose from US$671 million to US$747 million over the same period. This year, buoyed by record bullion prices, the sector is projected to surpass US$7 billion in earnings.
Against this backdrop, Ncube argued that the current tax structure is failing to capture a fair share of this growth. He noted that despite escalating commodity prices, the Fiscus is not benefiting proportionately, with most of the gains accruing to investors.
“Whilst mining companies contend that high royalties discourage investment and exploration, statistics on mining revenues indicate that the Fiscus is not benefiting from increased mining activity and commodity booms. Ultimately, a significant portion of the profits accrues to investors,” he said.
He added that the historic surge in global gold prices, exceeding US$4,000 per ounce as of October 2025, presents a strategic moment for the government to strengthen value retention without undermining investment.
“International gold prices have reached historically high levels… This exceptional price environment presents a strategic opportunity for both Government and mining operators to enhance value retention from the mineral resource, whilst ensuring continued investment and viability in the gold subsector,” he said.
Ncube explained that fixed royalty rates on most minerals limit fiscal responsiveness to commodity price movements. To address this, he proposed harmonising and reviewing royalty rates for all gold producers under a tiered system effective 1 January 2026.
Under the new structure, royalties will be set at 3% when gold prices range between US$0 and US$1,200 per ounce, 5% when prices are between US$1,201 and US$2,500, and 10% for prices above US$2,501.
Justifying the shift, Ncube said the current system, where small-scale and large-scale producers pay different rates, has created administrative complexities and opportunities for tax arbitrage.
He warned that these differences have been exploited through misreporting, under-declaration and strategic restructuring of ownership.
The minister also highlighted persistent challenges with transfer pricing, where opaque contracts and related-party sales have allowed companies to declare lower taxable profits.
“Notable schemes include related-party transactions of minerals, which are often undervalued through opaque transfer pricing practices such as market price adjustments and intercompany agreements,” he said.
To tighten controls, the government is introducing the Quoted Price Method as the primary transfer pricing rule for mineral exports.
This method relies on globally recognised price benchmarks, including the London Metal Exchange, Metal Bulletin and the Shanghai Metals Market, to ensure minerals are valued in line with prevailing international prices.
For decades, the mining industry has been the backbone of Zimbabwe’s economy, accounting for over 60% of export earnings and supporting hundreds of thousands of jobs. However, instead of merely driving growth, the government now wants the sector to contribute a more equitable share of national revenue through these strengthened fiscal measures.
