Miners Call for Tax Review

Rutendo Mazhindu

Zim Now Reporter

Zimbabwe’s mining sector is urging the government to reconsider its current tax policies, warning that the existing framework could hinder the industry’s sustainability and discourage vital investment.

As part of efforts to boost revenue, the government has ramped up tax collection, focusing heavily on formal businesses, particularly the mining sector. Mining, which generates significant foreign currency, is seen as a key pillar for national development.

However, the Chamber of Mines of Zimbabwe has cautioned that excessive taxation could have unintended consequences, stifling growth and limiting long-term economic contributions.

Isaac Kwesu, CEO of CoMZ, emphasised the need for a tax structure that supports investment while also helping the government meet its fiscal goals.

“The current tax framework for the mining sector needs to be reviewed to improve competitiveness and align with regional and international standards,” Kwesu said. “If Zimbabwe’s tax regime becomes too burdensome compared to neighboring countries, we risk losing investment to these jurisdictions.”

Kwesu stressed that the sector is committed to engaging with the government to find a balanced solution that supports both industrial growth and fiscal targets.

“We understand the government’s need to increase revenue, but this must be done in a way that doesn’t stifle the mining industry. A sustainable approach is essential to ensure long-term benefits for both the state and the sector,” he said.

Despite concerns over taxation, the mining sector saw notable growth in 2024, with mineral export earnings rising by 9% to US$5.9 billion. This increase was driven by higher production levels of key minerals such as gold, chrome, and coal.

Gold production, in particular, saw significant growth, surging by 21% to 38 tonnes, with earnings rising by 37% to US$2.5 billion. However, not all minerals performed well; platinum production declined by 1%, and nickel output fell by 15% due to price fluctuations.

A mining executive expressed concern that continued pressure on companies could undermine these gains.

“We’ve seen positive growth in gold production, but if the taxation and forex retention policies remain restrictive, some companies may scale down operations or reduce reinvestment,” the executive warned.

Government officials have acknowledged these concerns and confirmed that ongoing discussions are taking place with industry stakeholders to refine tax policies.

A senior official from the Ministry of Mines and Mining Development affirmed that the government is open to adjustments but stressed that mining companies must contribute fairly to national revenue.

“The government recognises the importance of mining in economic growth and job creation. However, mines also have a responsibility to contribute their fair share to national revenue,” the official stated. “We are reviewing the concerns raised by stakeholders and will ensure that any adjustments strike a balance between industrial growth and fiscal stability.”