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Friday, July 12, 2024

VAT removal on gold sales brings relief to miners

Story by Stanley James, Business Editor

GOVERNMENT’S directive on the removal of the 15 per cent Value Added Tax (VAT) on gold sales has taken effect, amid efforts to motivate gold miners to contribute more towards national economic growth.

Tax expert Mr Simbarashe Hamudi revealed tax authorities have since complied with the directive.

“Information that I have gathered indicates that ZIMRA has effected the directive with the gold miners being informed about the latest trends which is with effect from this month. It is coming at a time when the gold miners had raised concerns over the VAT arguing that it had created operational challenges. So in terms of the tax structures for the gold sales the new trend has been operationalised in a move that will further enable the miners to forge ahead with their business portfolios.”

Green Capital chairperson, Mr Dave Sahadath says the removal of the VAT on gold sales reflects government’s commitment to ease cost structures for the miners and attract more investments.

“Investors always look into the ease of doing reforms of a country if they want to do business and this is simple because if there are higher taxes they scare investors to the extent that they may not want to set up businesses in a particular economy. From my point of view, the interventions by the Government of Zimbabwe reflects its commitment to attract investors,” he noted.

Zimbabwe Miners Federation chief executive officer, Mr Wellington Takavarasha revealed that the zero rating of VAT on gold sales will boost deliveries, hence enabling Zimbabwe to achieve the 2024 gold delivery targets of at least 40 tonnes.

“The challenge is on viability. If you can assess the situation then you can see that gold deliveries have been on a subdued trend and the key reason was the 15 percent VAT on gold sales that also made it difficult for our players to stay afloat, but thanks to the government for taking care of our needs by scrapping the tax. In fact, that will go a long way on boosting confidence and enable the gold mining sector to realise its full potential in terms of growth and contribution to growth,” he revealed.

The Chamber of Mines notes that gold is the main foreign currency earner commodity for Zimbabwe.

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