Zimbabwe’s mining industry is engaged in discussions with the government over the punitive tax burden and retention levels, the Mines and Mining Development minister Winston Chitando has said.
Miners have been pushing for an option to pay all taxes in local currency to enable companies to have sufficient foreign currency to meet operational and expansion needs.
Chitando said discussions with the Ministry of Finance and Economic Development were currently underway, with the view to ease the tax burden and review retention levels.
“There is a discussion on what is called a consolidated mining physical structure and that’s a discussion the Ministry of Finance is working on so as to ease the tax burden on miners,” Chitando told BusinessTimes on the sidelines.
“Large scale gold mines have been complaining that retention is not sitting well with them. However, the issue of the foreign currency retention is an ongoing discussion all the time and the government is sensitive to that and now and again you will find that there are always changes which are tailor made to ensure that we sustain our industry.”
Added Chitando: “As of now, discussions to address the issues are currently taking place with input from the Chamber of Mines. However, I can’t give timelines.’’
Efforts to get a comment from the Chamber of Mines of Zimbabwe were futile.
The government is hoping that the mining sector will help revive the economy.
President Emmerson Mnangagwa’s administration has set an ambitious target to grow revenue from the sector to US$12bn by the end of next year.
The government has set a target of achieving a gold output of 100 tonnes.
Having achieved 30 tonnes last year, Chitando is confident the mining sector will meet the 100 tonnes target, banking on the performance of the big mines.
‘’On the 2023 gold target of 100 tonnes we are very confident. This year we are targeting at least 50 tonnes. Towards the end of last year, the monthly deliveries were actually getting closer to 4 tonnes so we are on course,’’ Chitando said.
Last year, the mining sector generated a record US$5.2bn in export earnings, compared to US$3.2bn in 2020, on the back of firming commodity prices.
In the outlook for 2022, anticipated global economic recovery is expected to be accompanied by favourable commodity prices.