Zimbabwe Govt. Demands Diamond Dividends

diamondsHarare: The Reserve Bank of Zimbabwe has ordered banks to deduct 15 percent special dividends from gross diamond sales, backdated to April this year in line with provisions of the 2014 Finance Act, but diamond miners have raised alarm, reports allafrica.com.

The Act signed into law in April had not been enforced since yet. The diamond producers said they will effectively be grounded by the move since they already pay more taxes and royalties to the Government and other shareholders.

Officials in the sector said they will end up having more than 50 percent of gross sales going to taxes, inclusive of royalties, management and depletion fees, with corporate tax chewing at least 25 percent at the end of each year.

A crisis meeting was called on Wednesday where miners made their reservations about the dividend.

Finance and Economic Development Minister Patrick Chinamasa introduced the 15 percent special dividend in the 2014 Finance Act that was passed in April.

RBZ Governor Dr John Mangudya, confirmed the directive and the Wednesday meeting, but referred questions to Mr Morris Mpofu, the head of Exchange Control, who attended the meeting.

“Yes, there was a meeting yesterday (Wednesday), but I was not there because I only came back yesterday evening,” said Dr Mangudya. “But you can speak to Head of Exchange Control Mr Mpofu, he is the one who attended the meeting.”