The fiscal budget for 2024 comes at a time when the Zimbabwean government is focusing on keeping its promise of building a more fair society, consolidating stability, and driving economic progress coming from the theme “Consolidating Economic Transformation”. Amongst the cocktail of measures set to be introduced by the Finance Ministry we look at the key measures set to be introduced affecting the mining sector.
MINERAL BENEFICIATION
As a result of increasing change in global systems towards use of cleaner energy sources, the financial budget statement makes provisions for the development of a comprehensive policy framework to beneficiate energy minerals including lithium to transform the country into a battery manufacturing hub.
Therefore, miners will be required to submit beneficiation plans by the 31st of March 2024. No licenses will be granted to prospective lithium companies without the approval of a beneficiation plan.
This is a move to improve local beneficiation of minerals especially lithium which is projected to grow in demand in line with the net zero mantra.
CAPITAL GAINS TAX
Another key highlight was that of the Minister of Finance proposing the transfer on every mineral rights being subject to Capital Gains Tax (CGT) and Stamp Duty based on the value of the transaction.
Furthermore, 20% of CGT on the proceeds of a mining title transfer will be charged on any mining title transferred within a 10-year period before 1 January 2024 and disposed of after 1 January 2024.
FORMALISATION OF ARTISANAL MINERS
The Minister noted that small scale miners have contributed immensely in the overall mineral output over the years. As such Government will be implementing measures to capacitate artisanal miners. The Ministry of Finance has set aside ZWL$2,7 Billion under the 2024 budget to capacitate the Mining Industry Loan Fund in order to provide small scale miners with affordable loan schemes.
MINING ROYALTIES IN KIND
In November 2022, the President published S.I. 189 of 2022 amending the Finance Act to the effect that royalties for certain minerals would be paid partly in kind and partly in cash. The Minister of Finance proposes in the 2024 Financial Budget to designate an agent for the collection of royalties in kind since they require physical collection.
NOTIFICATION OF THE INTENTION TO TRANSFER OR LEASE MINING RIGHTS
The Finance Minister proposed that all agreements for the transfer or disposal of mining rights ought to be lodged with the State for review and approval before implementation. He further proposed that mining rights holders should inform the government of the intention to transfer or lease such rights before transacting
--
Read the original publication at Muvingi Mugadza.
