Press Release: Suspension of Duty On Precious Minerals and Metals in Zambia

Zambia risks losing revenue from the suspension of Export Duty on precious stones and metals, warns Oxfam
Lusaka, Zambia – February 21, 2025

Zambia is likely to lose revenue from precious stones and metals following the recent government’s decision through Statutory Instrument No. 4 of 2025 to suspend the 15% Export Duty on precious stones and metals.

While this policy is supposedly aimed at making Zambia’s precious minerals more competitive on global markets and attract investment - it is the revenue that will be lost, and the social, and environmental impacts that this decision may have on the country’s long-term development and fiscal sustainability that is a major concern making the decision regressive.

The 2025 National Budget introduced progressive tax measures to the mining sector, including an increase in corporate income tax from 15% to 20% on profits from non-traditional exports and value-added copper. The government also introduced a 15% Advance Income Tax (AIT) on remittances exceeding US$2,000 for non-compliant entities – this was commendable.

The decision to scrap off this progressive tax measure, barely two months after being re-introduced, therefore contradicts the revised Mining Policy of 2023 that calls for a consultative, competitive, and sustainable mining tax regime. The Mining Policy also calls for designing a mineral tax regime which gives a fair return for both government and investors.

While this move is likely to benefit industry players by increasing mineral exports, it could significantly reduce Zambia’s ability to capture fair value from its natural resources. Without stringent oversight, this policy could contribute to revenue leakages, exacerbate illicit financial flows, and undermine the government's capacity to invest in essential services.

The mining sector remains one of Zambia’s largest revenue sources contributing about 15% to the country’s GDP in 2024. Precious minerals such as gemstones have also recorded an increase in production by 31%. Any reduction in taxation including on mineral exports risks reducing revenue particularly in a context of poor economic performance underlined by debt, energy and drought crises.

The treasury is already struggling to meet its social spending obligations in a bid to adhere to the negotiated IMF debt restructuring programme. This policy decision will therefore have more negative impacts on ordinary Zambians particularly in financing essential services such as education, healthcare, water, sanitation, and hygiene.
 

Oxfam therefore urges the Zambian Government to suspend the scraping off – of the Duty and consult all key stakeholders on the matter including civil society organizations so that the country adopts policies that benefit all Zambians, particularly marginalized communities. As concerns grow within the industry, including calls from stakeholders to reconsider the export tax on emeralds, there is need for a balanced approach that prioritizes social equity, environmental stewardship, and long-term economic resilience.
 

We further recommendation the following:
1. Conduct a Comprehensive Revenue Impact Assessment.
- Facilitate consultative multistakeholder forums to deliberate on the implications of the statutory instrument on a competitive and sustainable mining tax regime.

2.Strengthen Transparency and Tax Compliance in the Extractive Sector
- Publish simplified detailed reports on mineral production, exports, and tax contributions to ensure public accountability.
- Reinforce measures to prevent illicit financial flows and tax evasion by mining companies.
3. Ensure Meaningful Public Consultation and Stakeholder Engagement
- Engage civil society organizations, mining-affected communities, and economic experts in evaluating the long-term impact of this decision.
- Strengthen the National Mining Policy that balances investment incentives with economic justice and sustainability.

For further details and request for interviews contact Eric Malyangu on +263978023224 or through email, emalyangu@oxfam.org.uk