Zambia has announced that it will suspend its 15% export duty on gemstones, with effect from 1st January 2020.
Initially, the government had introduced the export duty, alongside a 6% mineral tax, with the hope of raising more revenue. However, it only served to undermine the production of gemstones.
Precious-stones producer, Gemfields, said that in its six months to end-June the export duty hampered its cash flow at Kagem to the tune of $5 million.
With the export duty and mineral tax in place, Kagem was paying 21% of its revenues to tax authorities.
However, the export duty still applies to diamonds.
The Kagem emerald mine is the world’s single largest producer of emeralds and accounts for approximately 25% of global emerald production.