Zimbabwe mulls diamond tax cuts to counter smuggling and under-invoicing

The Zimbabwean government plans to tackle diamond smuggling and under-invoicing by cutting taxes levied on miners, mines minister, Walter Chidakwa has announced.

He told delegates at a November conference that the measures will bolster strategies to stimulate diamond production and keep a higher proportion of the value derived from mining in Zimbabwe for the benefit of the country’s own economy.

Tax incentives
Addressing delegates to the 2nd Zimbabwe Diamond Conference in Harare, Chidakwa said the authorities were contemplating reducing taxes of diamond companies that channel their products to the local industry.

“We are looking at the possibility of reducing or eliminating royalties for those diamonds that are destined for local diamond cutting and polishing,” he said.

In-country benefits
The incentives would include the scrapping of the 15 per cent value added tax levied on diamond miners.

Zimbabwe has been badly stung by the leakage of the precious stones through smuggling and under-invoicing, and the government has been looking for ways to ensure that most diamonds are processed in-country instead of the being exported as raw stones.

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