High Court Rules In Favour Of ZIMASCO In ZIMRA Dispute
The High Court has ruled in favour of the Zimbabwe Mining and Smelting Company (ZIMASCO), exempting the company from paying over US$10 million in royalties to the Zimbabwe Revenue Authority (ZIMRA), reported Business Times.
According to the Mines and Minerals Act, miners are required to pay royalties to ZIMRA based on the output from their mining operations.
ZIMRA had ordered ZIMASCO, the country’s largest producer of ferrochrome, to pay this substantial amount following its assessment of the company’s tax affairs.
The authority claimed that ZIMASCO had inaccurately computed its royalties between January 2019 and September 2022.
After reviewing the arguments from both parties, High Court judge Justice Paul Musithu ruled that ZIMRA must refund ZIMASCO a total of US$2,485,183.83 and ZWG389,606,502.95.
The court found that chrome ore concentrates and ferrochrome, as mineral-bearing products, were exempt from royalties during the specified period.
The ruling clarified that royalties for these products only became applicable following the Finance Act of 2021.
Justice Musithu granted ZIMASCO’s application, determining that the mining company should not be liable for royalties on chrome ore concentrates and ferrochrome, given their status as mineral-bearing products. He ruled:
Resultantly it is ordered that the application be and is hereby granted with costs.
It is declared that chrome ore concentrates and ferrochrome are mineral-bearing products and no mining royalties are payable on their disposal.
Consequent to paragraph 2, the applicant is not liable to pay mining royalties to the respondent on the chrome ore concentrates and ferrochrome which the applicant disposed of during the period 1 January 2019 to 30 September 2022.
The schedules issued by the respondent to the applicant on 24 March 2023 for the total sums of ZWG881 544 511.00 and US$10 523 347.00, as shortfalls of mining royalties be and are hereby set aside.
The respondent is ordered to refund the sums of ZWG389 606 502.95 and US$ 2 485 183.83 and any other amount paid by the applicant to the respondent in discharging the mining royalties in the total sums of ZWG 881 544 511.00 and US$10 523 347.00, as the shortfall of mining royalties and penalties due by the applicant for the period January 2019 to September 2022.
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