“When combined with the pre-existing 6percent mineral royalty tax, Zambian emerald exporters must now pay an effective 21percent turnover tax on their revenues,” Banks said.
Kagem, the world's single largest producing emerald mine, is 75percent owned by Gemfields, and 25percent by the Industrial Development Corporation of Zambia.
“By contrast, the world's second and third largest emerald exporters, Colombia and Brazil, levy 2.5 and 2percent respectively, bringing about a watershed shift in tactical advantage,” Banks said.
“While the 15percent export duty shuts the door on foreign investors and new entrants interested in the Zambian emerald sector, the financial impact is being acutely felt by incumbent producers like Kagem. We continue to liaise with the key government departments in seeking resolution and remain hopeful that a solution will be found.”