Starting1st January 2020, Zambia will suspend its 15% export duty on gemstones.
This order was issued on December 13, 2019, by Bwalya Ng’andu, the Minister of Finance of Zambia. The goods covered include gemstones other than diamond, whether or not worked or graded, but not strung, mounted or set; ungraded gemstones (other than diamonds), or temporarily strung for convenience of transporting. The export duty still applies to diamonds.
Gemfields Group Ltd, which had seen its profits from its previous auctions sales hit by the duty, welcomed the move. Initially, the government had introduced the export duty, alongside a 6% mineral tax, with the aim of generating more revenue.
Last month, while publishing the results of its Singapore auction of Kagem emeralds, Gemfields had expressed concerns about the tax burden the company faced in Zambia. Gemfields Group Ltd, said that in its six months to end-June the export duty hampered its cash flow to the tune of $5 million.
The Emeralds and Semi-Precious Stones Mining Association of Zambia (ESMAZ) appealed to stakeholders and investors to support the government’s decision to grow the industry. ESMAZ President, Victor Kalesha, said that the decision shows its commitment to help improve performance in the industry. Mr. Kalesha told ZNBC News in a telephone interview.
He added that this will also help the industry increase its production to effectively pay mineral loyalties and sustain government revenue for economic growth. He commended the Ministries of finance and Mines for the gesture, adding that the duty was crippling the sector as many investors were reluctant to do business. Mr. Kalesha has also appealed to stakeholders and investors to collaborate with the government as they are the major beneficiaries.
Photo courtesy : Lusaka Times