The Supreme Court of Zimbabwe has dismissed an appeal by Zimbabwe Platinum Mines (Pvt) Ltd (Zimplats) against the Zimbabwe Revenue Authority (ZIMRA) regarding the calculation of income tax liabilities.
Zimplats argued that its method of calculating tax by deducting expenses in the currency they were incurred—USD expenses from USD income, and ZWL expenses from ZWL income—was correct. However, ZIMRA’s interpretation, requiring a 60:40 apportionment ratio for splitting foreign and local currency expenses, was upheld by both the High Court and the Supreme Court.
Zimplats, which operates under a General Mining Lease, generates income from both USD exports and ZWL local sales. Initially operating under a Special Mining Lease (SML) that mandated tax payments in USD, Zimplats shifted to a General Mining Lease subject to the general tax provisions of the Income Tax Act.
The Supreme Court confirmed ZIMRA’s apportionment method, stating it complied with the legal requirements and accurately reflected the mixed-currency nature of Zimplats’ operations. The court emphasized that Public Notices 36 and 57 of 2021 have legal force, and the 60:40 ratio is consistent with the legislative intent.
