Online Reporter
Gold is the country’s number one foreign currency earner, accounting for more than 70 percent of receipts.
It is the biggest source of employment as well, since an estimated 1,5 million people work as artisanal gold miners countrywide. Their sweat accounts for 70% of national gold output.
More people are formally employed by larger-scale gold producers as well.
Noting its key role in the economy and global best practices, the Government decided, in April 2024, to back the national currency, the Zimbabwe Gold, with gold.
Indeed, without gold, there is no Zimbabwean economy; without gold, 1,5 million people will not have a livelihood, and without gold, we won’t have a currency.
But gold must pay tax; more tax, said Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube while presenting the 2026 national budget proposal on November 27.
He proposed a new, higher royalty regime which seeks to align prices of the metal on the market with tax obligations.
Under the proposed framework, gold sold at prices between $0 and $1 200 per ounce will attract a 3% royalty, while gold trading within the range of $1 201 and $2 500 per ounce will incur a 5% tax. A top-tier rate of 10 percent will apply to gold sold at prices above $2 501 per ounce, making it the highest bracket in the proposed system.
The plan triggered a heated conversation with miners appealing to the Government to moderate the rate from 10 percent.
Speaking at a post-budget interface on Monday, Mr Isaac Kwesu, the CEO of the Chamber of Mines, said the proposed levy would be among the steepest globally. As a result, implementing it would compromise miners’ competitiveness and discourage investment.
He said countries like South Africa and Ghana maintain royalties at about five percent, while Namibia is at around six percent.
“We have listened to comments on the royalties on gold, and I think you may see some tweaking here and there, so we have listened. We received your submissions,” Prof Ncube responded.
It is important that the Government and gold miners have had this vital conversation, which, we hope, will result in a royalty which balances the need for the economy to derive more tax revenue as the gold market booms while preserving the health of the goose that lays the golden egg.
It goes without saying that the document that Prof Ncube presented to Parliament on November 27 is just a proposal, which means every element in it is subject to debate and possible change before the budget becomes effective on January 1.
Therefore, the royalty with respect to gold might be one of a number of changes that could be made ahead of the effective date.
There are discussions over other proposals to include micro-finance institutions in the intermediated money transfer tax net, tax US$ cash withdrawals and impose a withholding tax on offshore digital services payments and so on.
This consultative, inclusive and horizontal decision-making approach is what will continue to move the economy forward on a sustainable basis.
