In a landmark ruling, Zimasco has won its legal battle against the Zimbabwe Revenue Authority (Zimra), securing a judgment that exempts the company from paying US$10 million in royalties. The High Court decision followed a detailed examination of Zimasco’s royalty calculations for the period from 2019 to 2022.
The dispute arose after Zimra claimed that Zimasco had underpaid royalties by excluding distribution costs from its calculations. Zimra had issued claims amounting to ZWL881 million and US$10.5 million, but the court dismissed these, ordering Zimra to refund ZWL389 million and US$2.5 million to Zimasco.
The court ruled that chrome ore concentrates and ferrochrome are mineral-bearing products, which were not subject to royalties during the period under review. It also emphasized that royalties on such products only became applicable after the Finance Act of 2021.
This decision not only relieves Zimasco of a significant financial liability but also sets a crucial precedent in the interpretation of tax laws in Zimbabwe’s mining sector.
