Zimbabwe Temporarily Suspends 15% Tax on Diamond Sales

(IDEX Online News) – The government of Zimbabwe has temporarily suspended a 15-percent tax on diamond sales. According to newzimbabwe.com, the country’s finance minister and central bank governor cited a drop in production and low international gem prices in a letter to the International Monetary Fund (IMF).

The letter, written by finance minister Patrick Chinamasa and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the decision to suspend the tax was part of ongoing efforts to improve the viability of Zimbabwe’s mining industry.

"We have temporarily suspended the collection of the special dividend on diamond sales on the back of the drop in production and adverse price developments," said the letter, which was published on the IMF website, reported newzimbabwe.com.

The unpopular tax was implemented in October 2014 when mining companies were told to deduct a 15 percent tax from the gross sales of diamonds, backdated to April 2014. A move, which was widely criticized by the miners.

The news site said the IMF has downgraded Zimbabwe's 2015 growth forecast to 2.8 percent from 3.2 percent initially due to an underperforming mining sector and low agriculture production.