Miners applaud Govt
CLOUDINE MATOLA
Gold miners have welcomed the decision by the government to scrap the 15% value-added tax (VAT) as it is going to lessen the tax burden for the miners and boost their income, Business Times can report.
Wellington Takavarasha, CEO of the Zimbabwe Miners Federation (ZMF) said they appreciate the removal of the 15% VAT by the government because most miners were now evading tax by channelling their gold to illicit markets.
“…We applaud the removal of the 15% VAT tax on the gold delivered to Fidelity Gold Refinery,” Takavarasha said.
He added: “With 1% royalty paid by miners on top of the 15%, it meant that miners were paying 16%.
“So the ripple effect that this had was, it would actually make the small scale miners channel gold to the illicit market because they would try to run away with the VAT tax evasion, where the government would not benefit.”
According to Takavarasha, the government recognized the potential and importance of the gold industry and had to eliminate obstacles in order to increase the amount of gold that is sold through the official market.
According to Irvine Chinyenze, CEO of the Gold Miners Association of Zimbabwe, the removal of the VAT will improve their cash flows and productivity.
“The move is anticipated to bolster cash flows for miners.This in turn should result in an anticipated increase in production. The scrapping of VAT on gold deliveries is a welcome development and we applaud the Finance Minister for taking that initiative.Remember we were not only paying VAT but also 1% royalty making a total of 16%,” Chinyenze said.
Government has scrapped 15% VAT on gold deliveries in an effort to trying promote gold deliveries to FGR.
Minister of Finance, Economic Development and Investment Promotion Professor Mtuli Ncube scrapped the tax through Statutory Instruments 105 of 2024.
“The principal regulations are amended by the insertion of a new schedule after the First Schedule as follows; Second Schedule (Section 13). Zero Rate: Supply of gold to fidelity gold refinery (Private) Limited,” reads the statutory instrument.
Fidelity acting general manager, Peter Magaramombe said the statutory instrument is a move in the right direction in promotion and encouraging gold deliveries to the country’s sole buyer and marketer of the yellow metal.
