Africa-Press – Zimbabwe. Caledonia Mining Corporation and other gold producers have welcomed a reprieve after Finance Minister Mthuli Ncube withdrew three proposals in the 2026 National Budget that would have impacted earnings and investment.
Ncube had initially proposed increasing the gold royalty rate from 5% to 10% and introducing a 15% withholding tax on interest payable on offshore loans.
He also proposed changing the tax treatment of capital expenditure, replacing the current 100% upfront deduction with a deduction spread over the life of a project.
Following pushback from legislators, the proposal to raise the royalty rate will now only apply if the gold price exceeds US$5,000 per ounce, rather than US$2,500 as initially suggested.
The changes to capital expenditure deductions and the 15% withholding tax on offshore loan interest have both been withdrawn.
While the withholding tax would have had a limited impact on Caledonia’s existing operations, it could have adversely affected the company’s Bilboes Gold Project, which relies heavily on offshore debt funding.
Caledonia said the revised proposals, yet to be ratified by Parliament but expected to be enacted before the end of the year, should have no material impact on the financial outlook for its Zimbabwean assets, provided gold prices remain below US$5,000 per ounce.
Commenting on the development, Mark Learmonth, Chief Executive Officer of Caledonia, said:
“The 2026 National Budget of Zimbabwe is yet to be enacted into law. However, we welcome the revised provisions announced this week, which we believe demonstrate the Government of Zimbabwe’s support for the mining sector and the development of future mining projects in the country.”
Related:
ZIMRA: 2026 Budget Key Tax Measures
Zimbabwe Abandons Plan To Double Gold Royalties, Sets Higher Threshold For Windfall Tax
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