Government is set to raise royalty tax on platinum and lithium miners starting January 2023 as it seek to enhance revenue collection streams to meet rising expenditure, Finance Minister Mthuli Ncube said in his mid-term budget review presented to Parliamentarians yesterday.
The rate for platinum miners will double to 5 percent and a new rate of the same measure will apply for lithium producers.
Government finances were severely hit by rising inflation in first half of the year as inflation accelerated from 70 percent at the beginning of the year to 161 percent by June prompting the Finance chief to issue a supplementary budget.
“The 2% tax on platinum was sub-optimal therefore we propose a 5 percent tax rate in line with other countries in the region,” said the Minister.
The move will not be easily digestible for miners who are already faced with high operating costs.
This week power utility ZESA Holdings announced that it will raise power tariff to miners by 8 percent to meet its production cost.
Exporters, such as mining companies, will be charged 10.63 US cents per kWh from Aug. 1.
“ZESA will no longer be able to continue supplying electricity to exporting customers at USc9.86 as it is unsustainable,” said ZESA Executive Chairman Sydney Gata.