Zimbabwe has tabled new regulations for local companies, which include a doubling of mineral royalties for platinum miners.
The royalty rate for platinum miners – among them units of Anglo Platinum and Impala Platinum – has been raised from 2.5% to 5%.
Mineral royalties must now be paid “in both local and foreign currency in the ratio of 50:50”.
Former Finance Minister Tendai Biti has criticised the new measures on platinum mining companies, saying the platinum miners earn their income in US dollars and should be liable for taxation in foreign currency.
“Unjust tax breaks have cost Africa for decades,” said Biti.
Lithium mining companies must now pay a new 5% royalty.
Money transfer companies such as Western Union and Mukuru, which previously have been exempt from the Zimbabwean mobile money and electronic transaction tax, are now also covered by the regulations, with specific reference to “the internal transfer of money by authorised dealers”.
The rate of withholding tax chargeable to cross-border traders without tax certificates has also been raised from 10% to 30%, the Finance Bill 2022 reads.
“In order to mitigate against the risk of over or understating tax, taxpayers trading in more than one currency (will be required) to prepare two separate tax returns in the currency of trade. The expenditure qualifying for deduction under each tax return will be determined by the ratio of local to foreign currency income,” further reads the new Finance Bill 2022.
The government of Zimbabwe has also proposed the imposition of a beneficiation levy for shipments of platinum that is not fully beneficiated, factoring in the various stages of beneficiation of the precious metal.
Where a platinum miner “has built a plant in Zimbabwe capable of producing platinum group concentrates, a tax at the rate of 5% on the value of unbeneficiated platinum shall be levied” on exports.