JOHANNESBURG (miningweekly.com) – The Zambian government has suspended a 15% export duty on precious gemstones, excluding diamonds, JSE-listed Gemfields said on Thursday.
The suspension was announced the government gazette last week, and will take effect from January 1, 2020.
Gemfields, which owns 75% of the Kagem emerald mine, has previously said that the Zambian tax structure was crippling the gemstones industry.
The export duty came into effect on January 1, 2019, and was levied in addition to the long-standing 6% mineral royalty tax. This meant that Zambian gemstone exported had to pay a 21% turnover tax, compared with 2.5% and 2% in large-emerald exporting countries Columbia and Brazil, respectively.
In addition to the 21% turnover tax, Kagem’s profits are then taxed at the prevailing 30% corporate tax rate, imposing an aggregate tax rate that it says has closed the door on foreign investment in the Zambian gemstone sector.
The 15% export duty came into effect on January 1 and was levied in addition to the long-standing 6% mineral royalty tax. This means that law-abiding Zambian gemstone exporters face a 21% turnover tax, compared with 2.5% and 2% in large emerald-exporting countries Colombia and Brazil respectively.