30% withholding tax does not affect small-scale miners

Judith Phiri, Business Reporter

THE Zimbabwe Miners Federation (ZMF) has allayed fears among artisanal and small-scale miners assuring them that the 30 percent withholding tax does not affect those who are currently depositing gold with Fidelity Gold Refinery.

In Zimbabwe, withholding tax refers to the tax that is deducted or withheld by a person or entity making payments to another person or entity. The purpose of withholding tax is to collect tax revenue at the source, ensuring that the tax authorities receive their due regardless of whether the recipient of the payment fulfills their tax obligations.

In 2022, the Government reviewed the rate of the withholding tax upwards from 10 percent to 30 percent, while there are several types of withholding taxes applicable in Zimbabwe.

In a circular to all ZMF General Council Members seen by this publication, the ZMF Media Department, said: “Kindly note that the 30 percent withholding tax does not relate to small-scale miners who are currently depositing gold with Fidelity. We urge you to continue with the good work you are doing to achieve the 40 tonnes target for 2024.”

The Government early this month gazetted the Finance (No. 2) Act 13 of 2023 which promulgates revenue measures announced by Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube in the 2024 National Budget, later approved by Parliament and Senate.

The gazetted tax policies continue to be effected in line with the National Budget provisions.

For the mining sector, mining tax revenue contribution include the Capital Gains Tax and Stamp Duty which will see all documents or agreements for the transfer or disposal or lease of mineral rights to be lodged with the State for review and approval before the transaction is concluded.

In addition, no transfer of mining rights shall be approved without payment of capital gains tax and stamp duty or any other tax due on the value of the transaction.

It is also noted that the failure to abide by this condition shall render the disposal or lease of mining rights null and void.