The Zimbabwe Revenue Authority (Zimra) has detailed a suite of tax incentives for lithium miners while unveiling an aggressive digitalisation drive to clamp down on revenue leakage, as the government pushes to capture greater value from the country’s critical mineral resources, Mining Zimbabwe can report.
By Rudairo Mapuranga
Speaking at the Chamber of Mines of Zimbabwe Annual Mining Conference and Exhibition, held under the theme “Unlock Value, Maximise Benefits, Sustain Growth”, Zimra Domestic Taxes Regional Manager for Bulawayo, Mr Lisani Dube, outlined the tax regime governing the rapidly expanding lithium sector.
The conference comes as Zimbabwe’s mining industry projects foreign currency earnings of more than US$7 billion this year, up from around US$4 billion in 2025. Lithium output surged by 54% in the first quarter of 2026, with exports anticipated to reach US$700 million.
Tax Incentives for Mining Operations
Dube highlighted several provisions designed to encourage investment and beneficiation:
Special Mining Leases: An additional capital allowance is triggered when a project’s internal rate of return exceeds 15%. Holders of special mining leases are taxed at a special rate of 15%.
100% Capital Allowances: Full deductions are permitted in the year of assessment through the Special Initial Allowance (SIA).
Immediate Deductions: Exploration, development and shaft-sinking costs are immediately deductible.
Loss Carry-Forward: Assessed losses from mining operations may be carried forward indefinitely—a significant advantage over the six-year limit applicable to other entities.
Lithium Royalties: Set at 7% of gross market value, with half payable in physical refined mineral and the other half in the currency of trade. Despite exporting 1.5 million tonnes of lithium in 2025, generating US$571.6 million, the government received only approximately US$40 million in royalties.
Taxes must be paid in US dollars, in accordance with the Finance Act provisions.
Capital Gains Tax Framework
Dube also clarified the capital gains tax regime for mining assets:
Standard CGT is imposed at 20% on assets acquired after 2021, while 5% applies to assets acquired prior to 31 December 2020.
Listed marketable securities incur a reduced rate of 1% or 1.5% withholding tax.
Special Mining Capital Gains: Disposal of mining claims is treated as ordinary income, not capital gains, attracting normal income tax at preferential rates.
Indirect Transfers: Where an offshore parent company owning a Zimbabwean lithium asset is sold, the transaction triggers local tax liability.
Group Sales Relief: CGT is deferred on transfers between 100%-owned subsidiaries through a rollover mechanism. Tax payable by the transferring company is rolled over to the recipient until it eventually disposes of the asset.
Transfer of ownership at the Ministry of Mines requires a valid tax clearance certificate from Zimra.
Digitalisation Drive
Dube outlined Zimra’s key digital initiatives:
Tax and Revenue Management System (TaRMS): An integrated digital platform for taxpayer registration, filing, payment and compliance management, enabling risk-based monitoring across the mining value chain.
Fiscalisation Data Management System (FDMS): Enables real-time electronic transmission of transactional data to Zimra.
Virtual Fiscal Devices: Allow integration between taxpayer systems and Zimra platforms, improving transaction visibility and reducing under-declaration opportunities.
Zimra has also deployed artificial intelligence-enabled risk engines to cross-reference customs data, transfer pricing documentation, financial statements, banking flows and corporate group structures. The AI initiative forms part of a five-year transformation strategy launched in 2025. Companies flagged as high risk face backdated tax assessments, penalties, interest charges and potential criminal investigations.
The enforcement drive has sparked tensions. The Zimbabwe National Chamber of Commerce has warned that aggressive audits are increasing cost pressures, with some firms facing multiple audits within months.
The 10% Beneficiation Tax Controversy
Dube’s presentation did not directly address the ongoing dispute over the 10% beneficiation tax on lithium concentrates, an issue that has created significant friction between producers and Zimra.
The government and Zimbabwe Lithium Exporters had reportedly agreed that the tax would only take effect once local processing plants were operational, effectively deferring collection until 2027. However, Zimra has already begun enforcing the tax.
Producers argue this premature enforcement undermines ongoing investments in local processing infrastructure. The Chamber of Mines, with the support of the Minister of Mines, is engaging the Minister of Finance on the matter.
The taxation debate is further complicated by royalty calculations. The Chamber and the Minister of Mines have held meetings with the Minister of Finance to resolve concerns, with agreement in principle that royalties should be levied on lithium concentrates rather than the more expensive refined lithium carbonate.
Broader Context: Export Ban and Beneficiation Push
The tax discussions unfold against a backdrop of sweeping policy changes. On 25 February 2026, Mines Minister Dr Polite Kambamura suspended all raw mineral and lithium concentrate exports with immediate effect. The ban was driven by evidence of widespread under-declaration of mineral content, under-evaluation of exports and transfer pricing practices that have systematically stripped value from Zimbabwe’s lithium sector.
In April 2026, the Minister issued an 11-point directive outlining conditions for the ban’s removal, including:
- Lithium sulphate plants operational by 1 January 2027
- A 10% beneficiation tax on all concentrate exports
- Assay laboratories at each producing mine within three months
- Monthly progress reports to a ministerial committee
The government is transitioning the industry towards local beneficiation, with four major lithium sulphate plants expected to be operational by late 2026. Prospect Lithium Zimbabwe’s US$400 million sulphate plant in Goromonzi is already complete and is expected to produce 50,000–60,000 tonnes annually.
Dube outlined the Authority’s four key commitments:
- Facilitating voluntary compliance through taxpayer education and digital transformation.
- Promoting fairness and certainty in tax law administration.
- Strengthening collaboration with industry and other stakeholders.
- Combating tax evasion and other forms of illicit financial flows.
Industry Expectations
Zimra encouraged industry players to register for all applicable taxes, maintain proper accounting records, adopt transparent pricing mechanisms, make timely disclosures, and engage proactively with the Authority.
“Compliance is a shared responsibility. The government and the industry must work together,” Dube said.
