Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, has hinted at possible changes to the newly-proposed gold royalties, as the Government moves to refine its revenue framework, while supporting industry viability.
Speaking at the post-Budget breakfast meeting on Monday, Minister Ncube said the Government had taken note of concerns raised by the Chamber of Mines of Zimbabwe (CoMZ) over the proposed royalty structure, which mining industry players fear will increase operating pressures amid fluctuating commodity prices.
The proposed royalty system, which comes into effect next year, introduces a three-tier structure designed to align tax obligations with market performance.
Under the proposed framework, gold sold at prices between US$0 and US$1 200 per ounce will attract a three percent royalty.
For gold trading within the range of US$1 201 and US$2 500 per ounce, the royalty rate rises to five percent.
A top-tier rate of 10 percent will apply to gold sold at prices above US$2 501 per ounce, making it the highest bracket in the new sliding-scale system.
In his 2026 National Budget Statement presented late last month, Minister Ncube highlighted that the move was to ensure the mining sector contributes a fair share of revenue to the fiscus during periods of commodity price boom, and to eliminate arbitrage between categories of miners.
Minister Ncube, however, showed willingness to consider tax adjustments for the sector, with authorities acknowledging concerns raised by miners over rising compliance costs.
“We have listened to comments on the royalties on gold, and I think you may see some tweaking here and there, so we have listened. We received your submissions,” said Minister Ncube.
The remarks come at a time when the mining sector, which is Zimbabwe’s largest foreign-currency earner, is pushing for adjustments to some policies to preserve margins, attract new investments and sustain production growth.
Speaking at the meeting, CoMZ CEO Mr Isaac Kwesu renewed calls for a downward review of the country’s mining royalty framework, warning that the current rates are now among the highest globally and will undermine competitiveness.
Mr Kwesu noted that Zimbabwe’s royalty regime, which has been earmarked to increase from five to 10 percent, significantly exceeds regional and international averages.
“Our research statistics reveal that the majority of royalties in the region, on the continent or globally range between 4-5 percent on average. Our current structure, which extends to the upper limit of 10 percent, places Zimbabwe far above most jurisdictions,” said Mr Kwesu.
Industry players argue that a more flexible royalty regime, responsive to global price movements, would help stabilise cash flows and strengthen long-term planning.
He said any review would need to strike a balance between maintaining Government revenue and ensuring that producers remain competitive regionally.
According to the Chamber, peer countries such as South Africa and Ghana maintain royalties at about five percent, while Namibia is at around six percent, which highlights the growing gap between Zimbabwe and other competitive mining destinations.
The mining body warned that the high royalty burden is squeezing margins, discouraging investment and undermining the viability of both new and existing projects, especially in commodities facing price volatility.
“Zimbabwe is now among the highest in the world, but aligning the royalty structure with regional benchmarks would help attract fresh capital, stimulate exploration, and boost production.”
The Chamber said it remains committed to continued dialogue with policymakers to ensure a balanced fiscal regime that supports both Government revenue and long-term industry growth.
The mining sector contributed more than 60 percent of the country’s export earnings last year, with gold, platinum group metals, diamonds and lithium driving output.
Bankers Association of Zimbabwe (BAZ) president Dr Sibongile Moyo cautioned that new tax measures proposed in the 2026 National Budget risk undermining investment in the mining and export agriculture sectors, two of Zimbabwe’s critical productive sectors.
She said while banks remain eager to finance these two productive sectors, the viability of key projects, especially in mining, has come under strain following changes to capital expenditure (CapEx) tax treatment and increased royalty charges.
Dr Moyo warned that some major mine development proposals were already being shelved due to the proposed adjustment of gold royalties to 10 percent across the entire gold price range.
“We do not have a single senior gold miner operating in Zimbabwe, despite hosting some of the richest low-cost reserves in the region.
‘‘High royalties and restricted CapEx allowances make industrial-scale mine development almost impossible. The economics simply do not work.”
“Cash that was previously committed to expanding operations must now be diverted to meet immediate tax obligations,” said Dr Moyo.
Under the Budget, current CapEx is no longer tax-deductible, meaning expenditure that companies previously wrote off in the year it was incurred must now be amortised over the life of the mine, which significantly reduces the free cash flows available to finance ongoing development.
The post budget breakfast meeting was organized by Zimpapers in partnership with CZI. – Herald
