Lawmakers move to amend mineral tax law

Rwanda is seeking to amend its mineral tax law with a view to to promote value addition for higher revenues and discourage the exportation of the valuable natural substances in raw form, according to a Bill before parliament. The Nyasa Times reports that the draft law establishing tax on minerals seeks to replace the current law of 2013 on mineral taxes. An explanatory note points out that the existing law presents loopholes including inefficiency in promoting value addition to minerals as both exporters of processed and unprocessed minerals pay the same tax rates, which adversely affects the mineral smelters and refineries. The new Bill attempts to address this issue, in line with the National Strategy for Transformation target to attract investment in mineral processing and value addition in the mining sector and contribute to job creation.

Article 4 of the new Bill sets low rates of mining royalty tax applicable to minerals supplied to the local mineral processing facilities to encourage value addition. The tax rates are 3% of the norm value for base metals; 2% of the gross value for gemstones and 2% of the norm value for platinum group metals. The New Times notes that others are rare earth elements (high-tech metals such as uranium) that could attract a 2% tax rate of the norm value, energy minerals (such as lithium and cobalt) with 3% of the norm value; and the category of gold with 0.5% of the norm value – which is the lowest proposed rate of all.