Gvt to reduce tax charges on gold miners

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…Miners demand reduction in electricity tariffs

Ngoni Dapira

THE Deputy Minister of Mines and Mining Development Fred Moyo has revealed that Government is looking into reducing the 17 percent taxation charges on gold miners which he cited as too high.

The deputy Minister said this last Friday at the inaugural Manicaland Small Scale Miners breakfast indaba held in Mutare at the Golden Peacock Villa Hotel.

The response came after small scale gold miners had complained about the high tax charges and high electricity tariffs on their mining companies.

“I agree that the 17 percent cost of gold mining at the moment is too high and as government we are looking into it. But for now please just try to increase your production as we also work on the altering of the policy issues, which we will definitely do,” he said.

He added, “I do not agree with Zimra (Zimbabwe Revenue Authority) on how miners must be taxed. The challenge for government now is how to tax informal and small scale businesses and it is something we are working on as government. Mining is a special endeavour which needs to be understood first in terms of its complex production line, especially in the gold mining sector, whether it is an individual or a company.”

Ms Madya stressing her point during the plenary session.

The millers also complained about the yearly custom milling charge of $5000 and said it was still too high, even after government reduced it from $8000.

“During the rainy season from November to February there is little to no ore after mining operations minimize, of which, this year with the excessive rains up to March there was little work for us millers. About five months of no business. These drawbacks should be considered when fees are being charged. “We appreciate that government reduced the charge from $8000 to $5000 per year but it’s still too high especially for some of us with one mill. Please reduce it to around $3000 or make it variable according to the number of mills one has,” said Ms Evelyn Madya the national best woman gold miller of the Reserve Bank of Zimbabwe 2016 Gold Producers Awards, during the open question and answer session.

Mines and Mining Development Manicaland director Engineer Christopher Dube said the $5000 fee was for custom milling plants irrespective of how many mills one has.

“If one has an elution plant and is cyaniding the person is charged $1000 for custom elution and $500 if you are eluting your personal carbon. We do not charge for the cyanide process,” said Eng Dube.

On electricity charges the deputy Minister said the 13 cents per kilowatt hour charge on gold miners was settled for when gold was still selling at $1700 per ounce but the international prices have since dropped to $1200 per ounce.

He said as a Ministry they were negotiating with the Ministry of Energy and Power Development to reduce it to 9 cents/KWhr, the general charge on most manufacturing industry.

“We have not yet really agreed on the final rate but negotiations are in progress. Chrome is at 6.7 cents/KWhr and platinum at 9 cents/ KWhr, so I see no reason why power charges on gold miners cannot be reduced after international gold prices dropped,” said the deputy Minister.

Deputy Minister Moyo however urged small scale gold miners to meet the set targets of increasing last year’s targets by 25 percent.

“If u did about 300kgs last year as a province then this year you increase by 25 percent. If you do that your royalties will be scrapped and if you had paid we will reimburse you,” he said.

This year government put the national gold delivery target at 28 tonnes from 24 tonnes last year. Manicaland targets were put at 700kgs from 500kgs last year, whilst traditional big mining regions like Mashonaland Central, Midlands and Matabeleland South were given varying targets ranging from two to three tonnes.

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