Zambia’s Gold Tax Could Drive Billions of Dollars of Trade Elsewhere

Zambia is considering reducing a 16% value-added tax on gold to encourage artisanal and small-scale miners to sell through formal channels, as discrepancies in trade data highlight challenges in tracking the country’s precious metals trade.

Hapenga Kabeta, permanent secretary at Zambia’s Ministry of Mines and Minerals Development, said the government was considering lowering the VAT to make it easier for artisanal and small-scale miners to trade gold formally.

The discussion followed a meeting with representatives of the World Gold Council, where Grant Crosse, a member of the organisation, called for a reduction in the tax.

Crosse estimated that Zambia could be losing between $80 million and $240 million in mineral royalties because much of its gold sector remains outside formal channels.

The proposal comes as Zambia seeks to diversify its mining revenues beyond copper, which dominates its exports.

Trade data illustrate the difficulty authorities face in tracking gold flows. World Bank WITS data, based on UN Comtrade, show Zambia reported about $61,800 in exports of unwrought non-monetary gold to the United Arab Emirates in 2023.

UAE trade data for the same product category, however, recorded nearly $1.79 billion of imports from Zambia that year.

Such mirror-trade discrepancies do not necessarily indicate smuggling or unreported exports. Differences can arise from valuation methods, reporting periods, transit routes and how countries determine and record the origin of goods.

The large gap nonetheless highlights the difficulty of monitoring gold flows and ensuring that applicable taxes and royalties are collected.

Zambia borders the Democratic Republic of Congo, a major mineral producer where authorities have also sought to bring artisanal gold production into formal trading channels.

Gold is currently subject to a 6% mineral royalty in Zambia. The Zambia Revenue Authority requires mining licence holders and artisanal mining-right holders to pay mineral royalties, while people in possession of locally extracted minerals on which royalties have not been paid can also become liable.

Zambia has previously sought to change taxes on precious metals as it tries to increase government revenue without undermining the competitiveness of its mining industry.

The government proposed a 15% export duty on gemstones and precious metals in its 2025 budget. It later suspended the measure after industry participants argued that exporters would face both the export duty and the existing 6% mineral royalty.

Finance Minister Situmbeko Musokotwane told parliament in February 2025 that the government had initially expected the export duty to generate about 250 million Zambian kwacha ($13 million) in additional revenue.

Authorities subsequently concluded that the measure could discourage production and investment, potentially reducing collections from mineral royalties and corporate income tax.

The latest proposal to reduce VAT reflects a similar effort to balance tax collection with incentives for miners and traders to operate through formal markets.

Gold accounted for about 2% of Zambia’s goods exports in 2024, worth roughly $262 million, according to U.S. Geological Survey data cited in the source material. Copper exports were worth about $7.5 billion.

International trade records, however, suggest that gold attributed to Zambia in foreign import data can be substantially higher than the country’s reported domestic gold exports.

Formalising artisanal mining and gold trading could give the government greater visibility into the sector while broadening its tax base.

Zambia is also seeking to deepen its domestic gold investment market. The Lusaka Securities Exchange is preparing to launch the country’s first gold exchange-traded fund before the end of October, according to the source material.

The proposed VAT reduction and planned gold ETF come as Zambia seeks to develop a formal gold market alongside its much larger copper industry.

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