Miners welcome royalties reduction

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THE government’s move to cut royalties imposed on gold producers to 5% from 7% and the scrapping of presumptive tax will help reduce the smuggling of the precious metals outside the country, the Zimbabwe Miners’ Federation (ZMF) has said.

THE government’s move to cut royalties imposed on gold producers to 5% from 7% and the scrapping of presumptive tax will help reduce the smuggling of the precious metals outside the country, the Zimbabwe Miners’ Federation (ZMF) has said.

STEPHEN CHADENGA OWN CORRESPONDENT

A small-scale mining association in Shurugwi recently revealed that most of its members were selling their gold on the black market as Fidelity Printers was failing to offer competitive prices.

The Shurugwi Small-scale Miners’ Association said most of the gold from miners was finding its way across the Limpopo where prices were lucrative.

However, ZMF spokesperson Dosman Mangisi yesterday said the announcement in the mid-term fiscal policy by Finance minister Patrick Chinamasa last week to cut gold royalties and taxes would help curb leakage of the yellow metal.

“The decision will help in reducing the leaking of the precious mineral, mainly to South Africa, illegally hunting for better prices,” Mangisi said.

With effect from October 1, gold royalties on primary producers was reduced from 7% to 5% while presumptive tax on small gold miners would be completely scrapped.

Previously, small-scale miners were paying 2% presumptive tax, 3% royalties fee and 6% commission fee to Fidelity Printers.

Mangisi said the move was an incentive for miners to produce although he felt that most small-scale miners still needed to be capacitated through mining machinery.