IN November 2025, the Treasury unveiled its proposed 2026 national budget, detailing revenue and expenditure estimates, spending priorities, and strategic revenue mobilisation initiatives.
Notably, significant changes are proposed for the mining sector, underscoring the critical impact on stakeholders.
This column aims to conduct a comprehensive analysis of the budget’s implications for miners, highlighting opportunities and risks that demand urgent attention.
Mining
The 2026 executive budget predicts the mining sector to grow by 7,3% in 2025, then slow to 6,3% in 2026 and 5,7% in 2027.
This growth relies on stable global mineral prices, low fuel costs, and rising gold prices.
The proposed 2026 national budget allocates ZiG789 million (US$31,1 million) to the ministry in charge of mining, aiming for legislative reforms (the Mines and Minerals Amendment Bill), promoting local value addition and beneficiation, upgrading mineral processing and refining capacity, gathering mineral exploration data, preventing leakages, finalising the operation of the mining cadastre information system, and engaging communities for benefits sharing.
However, it is important to note that some of these mining sector targets are ongoing and require significant time.
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For example, the amendment to the outdated Mines and Minerals Act has been delayed in Parliament.
I urge the responsible authorities to accelerate these efforts in 2026 to manage natural resources and revenue effectively. Pursuit must also be given to plugging resource leakages from mining-sector corruption and illicit financial flows.
It is essential to highlight that the 2026 national budget considers the mining sector a significant source of domestic revenue generation in 2026 and beyond. Therefore, the Treasury proposed comprehensive tax policy changes with substantial implications for the sector. These include:
Quoted price method
The government intends to adopt the Quoted Price Method (QPM) as the primary transfer pricing rule for mineral exports.
Treasury asserts that the QPM approach will improve mineral valuation by referencing recognised international benchmarks, such as those of the London Metal Exchange.
If fully implemented, this significant move will increase transparency and objectivity, helping to reduce opportunities for manipulation or disputes in transactions, especially in transfer pricing between related parties.
Most importantly, by using fair market values, the QPM will help ensure that Zimbabwe secures its fair share of the financial benefits through accurate royalty and tax calculations, capturing more revenue during periods of high mineral prices. All of this aims to boost mining tax revenue collection in 2026 and beyond.
Royalty structure
The 2026 national budget statement proposes harmonising royalty rates between large-scale and small-scale producers to reduce administrative complexity, tax arbitrage opportunities, and distortions in the gold value chain.
It further calls for the review of the gold royalty structure to ensure a fair contribution from the mining sector. In light of the foregoing, the Treasury suggests adopting a tiered royalty regimeresponsive to commodity price movements as follows:
Table 3: Proposed gold royalty rates
On the one hand, by harmonising and reviewing gold royalty rates, the government seeks to ensure the mining sector contributes a fair share of revenue to the fiscus during periods of commodity price booms, as well as to eliminate arbitrage between categories of miners.
On the other hand, the proposed 10% increase in gold royalties will likely discourage gold-sector investments and exploration.
As such, the 2026 national budget should strike a balance between achieving tax fairness and the profitability of gold miners.
Already, the gold sector is facing many challenges, including distortions from high export surrender requirements and severe electricity shortages, which cause frequent production disruptions.
Limitations of losses carried forward
The 2026 national budget statement revealed that current laws permit mining companies to carry forward losses indefinitely.
Losses are, therefore, fully deductible, allowing companies to defer tax payments even when profitable.
The Treasury argues that, despite long development periods for mining projects, delayed corporate income tax obligations threaten fiscal stability and predictability.
As a result, the 2026 executive budget proposes to limit deductible losses for mining companies to 30% per year, starting from the assessment year beginning January 1, 2026.
While the government seeks to promote tax fairness in the mining sector, this proposal presents significant risks if approved by Parliament. It effectively removes critical fiscal incentives designed to attract investment in the capital-intensive, high-risk mining industry.
Restricting indefinite loss carryforward means investors cannot be assured they can offset high costs against future income, making the country less appealing to both domestic and international investors.
Furthermore, this change could impede the development of long-term mining projects in a sector marked by substantial risks.
Therefore, I urge the Treasury to maintain full loss carryforward under current law or, at the very least, raise the deductible loss cap to 80%.
Deductibility of capital expenditures
The current legislation allows mining companies to claim a full deduction on mining exploration, development, and capital expenditure incurred “wholly and exclusively” for mining operations in the year the expenditure is incurred.
Treasury argues that whilst mining operators aim to expedite the recovery of significant upfront capital investments to maintain operational viability, current practice results in deferred tax inflows to the Fiscus.
To share financial risk between the government and mining houses, the proposed 2026 national budget proposes to align capital redemption allowance claims with the life of the mining asset, effective from the year of assessment commencing on January 1, 2026.
However, this policy stance introduces significant drawbacks for miners, including increased risk of unclaimed expenditures and exposure to operational risks.
Also, using the life of mine basis requires regular, certified estimates of ore reserves to justify the allowance period to tax authorities.
This can increase the administrative and compliance burden, requiring robust systems to track and align data flows with regulatory requirements.
Tax on unbeneficiated minerals
The 2026 executive budget proposed introducing export taxes on unbeneficiated minerals, including lithium, antimony, black granite, and chrome.
Since at least 80% of mineral commodities are exported in their raw form, Zimbabwe has been missing out on increased export earnings.
This also means that thousands of local jobs are effectively exported abroad. It also exposes mining companies to frequent global fluctuations, which can impact their operational viability.
Therefore, we support the proposed export tax, which aims to discourage the export of raw minerals.
However, this policy should be reinforced with attractive, sustainable fiscal incentives to encourage private investment in local processing of minerals into higher-value products.
Gold trading liberalisation
The 2026 executive budget revealed that the current gold trade legislation restricts dealing in and possessing gold to license and permit holders, holders or tributors, and those authorised under the Mines and Minerals Act.
However, these provisions did not consider the promotion of regulated investment products based on refined gold.
To modernise the legal framework and support gold as an alternative investment asset, the 2026 executive budget suggests expanding the categories of persons who may lawfully possess or deal in gold to include authorised dealers, the national gold refinery, and individuals holding certified gold bars issued by these entities.
The budget further recommends that holders of certified gold bars be permitted to pledge, exchange, sell, barter, or otherwise transact with these gold bars.
I believe that this proposal to liberalise gold trading is a significant step that will facilitate and accelerate the introduction of regulated, traceable investment-grade gold products, thereby providing citizens with a secure store of value.
This move will also be vital for attracting investment in the gold sector, increasing gold exports, developing gold-related industries, and creating employment opportunities across the gold value chain.
- Sibanda is an economist employed at Maxiquantus Capital Investments and Advisory. His perspectives are independent and do not necessarily reflect the views of his employer. — [email protected].
