High Taxes Threaten Zambia’s Gemstone Industry Despite Export Duty Relief

The Zambian government has suspended the 15% export duty on gemstones and precious metals but retains key taxes to sustain revenue. A 6% mineral royalty tax, higher than Brazil’s 2% and Colombia’s 2.5%, and a 30% corporate income tax remain in effect.

Finance Minister Dr. Situmbeko Musokotwane emphasized Zambia’s role as a top global gemstone exporter. The 15% export duty, introduced in 2019 to encourage local value addition, was suspended in 2020 and remains lifted to maintain industry competitiveness.

Despite this relief, the 6% mineral royalty tax increases production costs, making Zambian gemstones less competitive. The additional 30% corporate tax further impacts profitability. With gemstones auctioned internationally in Singapore and Jaipur, India, sellers have little control over pricing, making it difficult to pass on tax costs. Experts warn that high taxation could reduce investment, lead to stockpiling, and encourage under-declaration of exports.

While stakeholders advocate for a tax review, the government sees these levies as vital for public revenue and long-term industry growth. The suspension of export duty provides temporary relief, but concerns over taxation remain.

The government aims to balance tax policies with industry needs, fostering growth for both large-scale and small-scale miners, including over 300 artisanal miners. Ensuring fair taxation while promoting industry expansion remains a challenge as Zambia seeks a stronger presence in the global gemstone market.