The Zimbabwe Revenue Authority (Zimra) has begun deducting mining royalties on behalf of the national Treasury. The tax authority instructed all mining bodies to start abiding by the new conditions for making payments for mining royalties effective 27th May 2021. The payment in being made through banking institutions.
Zimra is supposed to ease the whole exercise for miners to remit royalties. The Minerals Marketing Corporation of Zimbabwe (MMCZ), which was placed under the exorbitant economic sanctions by the US Office of Foreign Assets Control (OFAC) in 2008, is still under US illegal economic sanctions. OFAC therefore has the ability to seize remittance to any mining body under US restrictions.
“All mineral exporters and financial institutions are hereby advised that, with effect from May 27th, this year, the responsibility to deduct and remit mining royalties to the Zimbabwe Revenue Authority shall be through financial institutions,” Zimra said.
A mining royalty is a self-governing right to collect a certain percentage of payment depending on the value of the mineral exported. Usually, mining royalties are calculated as a percentage of the gross worth of the minerals.
According to Zimra, authorised banks will subtract royalties from the total payment collected for mineral exports by mining companies or individuals in the business. This is through crediting the royalties’ account of the business partner. They will then submit the deducted amount on or before the 10th day of every month.
In the process of remitting the royalties, banking institutions will prepare and hand over a scheme of records indicating payment amounts to the National tax authority.
“The mineral exporters shall be required to complete the return REV 5C and submit to Zimra on or before the 10th day of the month following the month in which they were deducted,” the organisation explained.