Prospect Lithium Zimbabwe (PLZ) announced it has paid more than $100 million in taxes to the Zimbabwean government since commencing operations. In a recent statement, the company also called for a review of the country’s tax policies for the lithium sector, arguing that the current structure creates a “double taxation” burden.
The company’s concerns, articulated on Friday, center on the classification of export taxes and levies as non-deductible expenses. According to PLZ, this regulation means that while companies pay taxes on their profits, they cannot subtract the cost of export duties from their taxable income. The company contends this policy results in lithium producers being taxed on revenue that has already been subject to a levy.
Prospect Lithium Zimbabwe, which is owned by China-based Zhejiang Huayou Cobalt, operates a major lithium processing plant in Goromonzi, located east of Harare. The plant was commissioned in 2023 and has become a significant contributor to Zimbabwe’s mineral exports.
The call for tax reform comes as Zimbabwe aims to capitalize on its significant lithium reserves, which are among the largest in Africa. The government has implemented various fiscal measures, including export taxes on raw and semi-processed minerals, to increase state revenue from its natural resources. These policies are designed to encourage domestic processing and value addition within the mining sector.
In its statement, PLZ expressed its commitment to complying with its fiscal obligations but requested that government authorities reconsider the tax framework to support the long-term sustainability and competitiveness of the industry.
As of this report, Zimbabwean government officials have not issued a public response to Prospect Lithium Zimbabwe’s specific statement regarding its tax concerns. The request from PLZ highlights ongoing discussions between mining sector stakeholders and the government over the fiscal policies shaping one of the nation’s key economic drivers.
