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Oliver Kazunga Senior Business Reporter
THE government has removed royalties on rough diamonds sold to companies licensed to cut and polish the gemstones to promote beneficiation.

Presenting the 2015 National Budget yesterday, Finance and Economic Development Minister Patrick Chinamasa said the proposal was effective January 1, 2015.

“In order to encourage beneficiation, I propose to remove royalties on rough diamonds sold to firms licensed to cut and polish diamonds, with effect from 1 January 2015,” he said.

The minister said despite the country being one of the world’s biggest diamond producers, most of its gemstones were being exported in raw form.

This, he said, was detrimental to Zimbabwe as employment opportunities and potential revenues were being lost.

Turning to platinum, Minister Chinamasa said the government was introducing an export tax at a rate of 15 percent starting January 1, 2015.

“Platinum producers have, however, demonstrated efforts to beneficiate, to the extent that Zimbabwe Platinum Mines Limited will be commissioning a $200 million base metal refinery in the next 24 months.

“The facility will be expanded to accommodate other platinum producers.

I, therefore, propose to defer export tax on un-beneficiated platinum to January 1, 2017.”

Chinamasa said the long-term sustainability of the mining sector requires the government to put in place a mechanism to assess the economic impact of various policy decisions.

He said last year the government undertook to comprehensively review the fiscal mining regime, with a view to ensuring a balance between the viability of the mining industry and revenue inflows to the fiscus.

“The mining fiscal model will enable the government to design an appropriate tax system that attracts investment into the mining sector and promotes optimal mineral extraction and revenue generation, without sterilising minerals, that is, extraction of high grade ores, at the expense of less economic grades,” Chinamasa said.

“In addition, the model will be used as an audit tool to assess mineral and revenue leakages and also project future revenues from the mining sector.”

The minister said for transparency and accountability in the mining sector, the effectiveness of the mine fiscal model was dependent on the availability of quality data from the sector.

It is hoped that the availability of data would ensure transparency of mining operations.

“I, therefore, propose to compel mining houses to provide data to the Zimbabwe Revenue Authority, such as exploration costs, pre and post operative costs, debt-equity mix and repayment terms in a prescribed format,” he said.