The Zimbabwean government has suspended the 5 per cent levy on raw platinum exports.
The Treasury announced the tax in 2020, giving the country’s platinum miners two years to prepare before its planned introduction early this year.
Speaking during a recent interview with ZTN “The Mint Special” programme Finance and Economic Development Minister Mthuli Ncube said miners said the levy was choking their operations. He said:
They wrote to me and gave me good reasons as to why this tax is not a good tax and that it is hurting investments. Certainly, in their arguments, I was convinced and the Government was convinced and I also briefed His Excellence (the President).
And we decided, as a Government, to remove or suspend that tax, so it’s no longer applicable and this has been welcomed by the platinum industry.
Because it’s about a change in tax, it is always better to effect it in a Finance Bill Amendment, but that tax is not being collected by anyone.
He added that he had directed the Zimbabwe Revenue Authority (ZIMRA) to stop collecting the tax.
Why was it introduced in the 1st place?
i). To persuade miners to develop domestic value addition facilities, to optimise returns from its vast platinum deposits.
ii). Platinum miners are exporting the mineral to South Africa for refinement, largely in a raw or semi-processed state, depriving the country of significant potential revenues.
iii). Platinum together with gold, generate more than half the foreign exchange inflows from the mining sector.
Zimbabwe has the third biggest known platinum deposits. Producing mines:
a). Zimplats (a unit of South Africa’s Implats),
b). Mimosa Mining Company (co-owned by Implats and Sibanye Stillwater of South Africa), and
c). Unki Mine (a unit of Anglo-American).
Other platinum projects at various stages of development:
i). Great Dyke Investments (a joint venture between Zimbabwean and Russian investors)
ii). South African firm Tharisa Capital’s fledgling Karo Resources project and
iii). Bravura, fronted by Nigerian investor Benedict Peters.
Zimbabwe intends to grow mineral loads from mining to US$12 billion by 2023 from US$2.7 billion in 2017.
More: The Herald