Miners in Zimbabwe are obligated to pay royalties to the State from the minerals they would have extracted.
by Fungai Chimwamurombe and Nontokhozo Hope Moyo
Royalty is a charge that the government levies on the volume of minerals produced at a mine or the income or profit made from the sale of those minerals. These royalties are remitted to the Revenue Authority adding on to the state reserve. All issues regarding minerals in Zimbabwe are governed by the Mines and Minerals Act [Chapter 21:05] together with other ancillary legislation like the Reserve Bank of Zimbabwe Act [Chapter 22:15] together with the Finance Act.
Through Statutory Instrument 189 of 2022, the government of Zimbabwe has promulgated new regulations to the effect that mineral royalties are to be paid partly in kind and partly in monetary form. The mineral royalties are collected from minerals like gold, diamonds, platinum group metals, lithium and all other minerals deemed to be components of the reserves maintained by the Reserve Bank of Zimbabwe. These regulations have also caused timeous amendments to the Finance Act and the Reserve Bank of Zimbabwe Act so as to ensure the cooperation in application of legislation.
Royalties remitted to the Zimbabwe Revenue Authority in respect of gold and those minerals specified shall be paid on the basis of 50% in kind and 50% in monetary form. With regards the “in kind component”, miners have to submit actual minerals they would have extracted continuing 50% of the Royalty pegged on them. The 50% monetary component would be paid up as follows; 40% in the Zimbabwean dollar (ZWL) currency and 10% in foreign currency. Prior to the promulgation of these regulations, royalties were paid only in monetary form.
According to section 251 of the Mines and Minerals Act, miners are obliged to submit their royalty not later than the tenth day of each month. Any person who fails to pay their mining royalty to the Zimbabwe Revenue Authority shall be guilty of an offence and liable to payment of a fine and or imprisonment for a period not exceeding six months.
Many actors in the mining sector are encouraged not to be taken aback as the new regulations do not impose any increase in the rate of royalties further it comes as a benefit for the nation at large as the state revenue is increased.
Source: Mandaq
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
