Zambia Considers Gold VAT Cut to Boost Formal Trade
Zambia Reviews 16% Gold VAT as Government Moves to Formalise Artisanal Mining Trade
Zambia is considering reducing the 16% value-added tax (VAT) on gold as the Government seeks to encourage more artisanal and small-scale miners to trade through formal channels and increase revenue from the gold sector.
Ministry of Mines and Minerals Development Permanent Secretary Hapenga Kabeta said Government was reviewing the VAT structure following discussions with the World Gold Council, which has called for measures to make formal gold trading more accessible.
World Gold Council representative Grant Crosse said the 16% VAT was creating challenges across the gold value chain and estimated that Zambia could be losing between US$80 million and US$240 million in mineral royalties due to gold remaining outside formal trading channels.
The tax review comes amid a significant discrepancy between Zambian and international trade records.
United Arab Emirates data indicates that almost US$1.8 billion worth of gold from Zambia was imported in 2023, while Zambia recorded only a fraction of that value as direct exports to the UAE.
The discrepancy does not necessarily indicate that the full amount was smuggled or unreported, as differences can arise from valuation methods, reporting periods, transit routes and how importing and exporting countries record the origin of commodities.
Government is also advancing wider measures to formalise the gold industry. The Ministry of Mines is working on the proposed Zambia Gold Trade Agency, which would centralise the purchase and export of gold produced in the country.
The Government has also been implementing measures targeting artisanal mining, including training programmes and increased requirements around licensing, traceability and the legal handling of gold.
Zambia is seeking to increase the contribution of gold to the mining economy and capture more value from a sector that has traditionally operated on a smaller scale than the country’s copper industry.
A reduction in VAT, if approved, would form part of these broader efforts to encourage formal gold trading, improve traceability and strengthen mineral revenue collection.
