Gemstone Taxes – Blackmail?
By Dickson Jere
The Zambian government yesterday announced the suspension of the 15% export tax imposed on gemstones and precious stones – barely two months after it became effective – thereby triggering massive debate in the country.
Zambia is the second largest producer of emeralds from Colombia – with Kegem Emeralds Mine (owned by London based Gemfields Group) being the biggest precious metal mining company in Zambia.
In December 2024, the company announced a controversial decision to suspend operations at its mine citing “over supply” of the gemstones on the international market. It closed shop for six months and workers asked to stay home.
But that decision was made barely few weeks before the coming into effect of the 15% export duty on precious metals as announced by the Zambian government. Was it a coincidence? I did question the rationale behind the suspension of operations at the mines at that time.
Fast forward, Kagem issued another statement saying it had also suspended the sale of precious metals on account of the new 15% tax announced by government. It claimed that it was already paying 6% mineral royalty and the additional 15% meant the taxes would be 21% on the precious metals.
Kegem made it clear that it will lobby government for the immediate removal of the 15% taxes or lay off workers. Just a month after that statement, the Zambian government has given in and suspended the exports duty – just what Kagem wanted!
Now, this is not the first time this has happened. In 2019, under the PF government, a similar 15% export duty was introduced on gemstone and precious metals exports. It did not last even at that time. Government suspended the tax and zero rated the medals following similar threats and lobby by these companies.
Why was this tax reintroduced then?
If five years ago, we had similar problems, why didn’t the technocrats look into that before reintroducing the same tax in 2025? It looks like the issue is more of blackmail from the investors on this aspect of taxation. For government to have brought this tax back, it means the pros and cons of it was analyzed. There was some thinking that went into the decision.
Anyway, my point is that government should never bend to blackmail. The tax should have remained on our laws until the next budget cycle without being changed. What would stop other companies in different sectors from doing the same – suspend operations and sales – then argue about the impact it would cause to the economy.
A bad precedent is being set by the company. Arm twisting it is called.
And so far, it has worked twice!
Mr. Jere, comment on issues you understand. The law. Seek insight from professional like you who are experts in their field. When you come here and write articles to suggest things you have not knowledge of but want to instigate. You become no different from Mwamba. A Smart Alec.
Everyday is not the same, the market evolves and we need to evolve with it.
The first paragraph of the Minister’s rationale is very clear, why the decision is being made.
Below him are experts whose job is on a daily basis analyse these issues. We have a product that is not being bought in the market. And we asked the question why? Remember in any market we are not alone.
Speak to tax experts instead of questioning the integrity of the Minister. Just a few days ago you questioned the same of the office of the CJ. And may have swayed the narrative.
But Mr. Jere you are not doing Zambiabs a favour. Yes, we may not save everyone in our discourse. But let do the best we can and not nothing at all.
Stick to what you know best, and if you seek to dont know. Dont come across like you do and there question those that do this work for a living. Its like calling you a court Jester. I would be insulting what you do for a living and the work you do everyday from the time you set foot in law school. Mwamba maybe a trend. But is a very shortsighted distructive man who seeks short term gratification without a thought of those who are different from us, have not had the opportunity to enter a class and have limited sight into issues.