Business / Companies
Increase of taxes and royalties could impact New Dawn operation
15 May 2013 at 09:58hrs | Views
New Dawn Mining said its operations and development plans in Zimbabwe could be impacted by various factors, including, for example, increased taxes and royalties, mining fees, power and labor costs, the economic and business environment, and potential changes to the legislative and regulatory environment in Zimbabwe, any of which could impact the Company's mining operations, capital requirements and ability to operate.
The Zimbabwe government received, directly and indirectly, excluding power costs, an amount equal to 16.4% of New Dawn's gross revenue for the three months ended March 31, 2013. In addition, the Company said it continued to source approximately 70% of its equipment and consumable supplies and services from Zimbabwe-based suppliers.
During the three months ended March 31, 2013 and 2012, and the year ended September 30, 2012, the Company's Zimbabwe operations made payments to the Zimbabwean Government and its agencies as follows:
Recently, the Finance Minister, Tendai Biti announced that Zimbabwe will increase mining royalties soon to raise $132 million to bankroll the forthcoming elections.
In an economy expected to grow by five percent this year, mining and agriculture are the two major economic drivers and Biti is mulling introducing new taxes for miners to bankroll the forthcoming elections instead of borrowing on the debt markets.
Biti said he was mulling introducing three or four other taxes, including some on the mining sector.
However, it is anticipated that further pressure on the mining sector could deter investment in the country, which has the world's second largest reserves of platinum.
Besides mining royalties, Biti also hopes to raise cash from the international community, diamond revenue, and mobile telecommunication firms' licence fees.
The Zimbabwe government received, directly and indirectly, excluding power costs, an amount equal to 16.4% of New Dawn's gross revenue for the three months ended March 31, 2013. In addition, the Company said it continued to source approximately 70% of its equipment and consumable supplies and services from Zimbabwe-based suppliers.
During the three months ended March 31, 2013 and 2012, and the year ended September 30, 2012, the Company's Zimbabwe operations made payments to the Zimbabwean Government and its agencies as follows:
| New Dawn Mining | 3 months ended 31 March | Year ended | |
| 2013 | 2012 | 2012 | |
| Gross revenue | $14,986,200 | $14,857,212 | $61,947,433 |
| Taxes and levies | |||
| Corporate taxes | $ - | $187,315 | $187,315 |
| Royalties | $1,051,632 | $979,360 | $3,898,969 |
| Duty | $148,708 | $184,915 | $1,009,523 |
| Licenses & levies | $147,214 | $108,578 | $267,638 |
| Rural electrification levy | $105,133 | $141,299 | $487,507 |
| Payroll remittances | |||
| Deductions from employees | $667,960 | $705,489 | $3,116,704 |
| Employee contributions |
$342,563 | $289,628 | $1,444,958 |
| Total taxes and levies | $2,463,240 | $2,596,584 | $10,412,614 |
| % of gross revenue | 16.40% | 17.50% | 16.80% |
| Govt controlled entities | |||
| Electricity (Zesa) | $2,230,186 | $2,458,259 | $9,071,452 |
Recently, the Finance Minister, Tendai Biti announced that Zimbabwe will increase mining royalties soon to raise $132 million to bankroll the forthcoming elections.
Biti said he was mulling introducing three or four other taxes, including some on the mining sector.
However, it is anticipated that further pressure on the mining sector could deter investment in the country, which has the world's second largest reserves of platinum.
Besides mining royalties, Biti also hopes to raise cash from the international community, diamond revenue, and mobile telecommunication firms' licence fees.
Source - Byo24News
