RBZ backdates royalties collection

By Tatira Zwinoira | Jan. 26, 2023 | 2 Min read

Reserve Bank of Zimbabwe

THE Reserve Bank of Zimbabwe (RBZ) says it will begin to implement legislative measures announced through amendments to the Finance Act [Chapter 23:04] and RBZ Act [Chapter 22:15], which provide for the collection of 50% of royalties in kind, or in the form of minerals.

In a statement yesterday, central bank governor John Mangudya said the measures would be implemented dating back to October 1, 2022.

The laws stipulate that the bank can collect royalties in the form of gold, and other reserve assets such as diamonds, platinum, and lithium and any other precious stone or precious or valuable metal as specified by the bank by notice in a statutory instrument.

“The rationale for the legislative changes is to enable the bank to collect, hold and manage reserve assets for the benefit of the Republic of Zimbabwe and, as such, all in-kind royalties shall be delivered to the bank,” Mangudya said, indicating that delivery of the royalties shall be subject to, and in compliance with applicable industry practices and regulatory requirements.

“It shall be the responsibility of the bank to facilitate the collection or delivery of the in-kind portion of the royalties and for the avoidance of doubt, only the cash portion shall be collectible by Zimra [Zimbabwe Revenue Authority],” Mangudya said in the statement.

“In order to ensure that the value of the reserve assets held is preserved or enhanced, the bank shall have the discretion to determine which prescribed mineral or metal to keep, hold or maintain from time to time, as dictated by prevailing local and international economic conditions and commodity pricing trends.

“In line with its mandate to hold, maintain and preserve the value of the reserve assets, where the bank considers and determines that it is not economic or possible to keep any mineral or metal specified in terms of section 49(1)(c1) of the Reserve Bank of Zimbabwe Act, it shall facilitate and make arrangements that the portion of the royalty payable in kind is converted to cash, which the bank will utilise to promote and purchase another specified mineral or metal for the equivalent value, which it will keep as a reserve asset.”