Zimplats hit with $28m royalties bill

Harare - Zimbabwe has instructed bankers for Zimplats, a local unit of Impala Platinum Holdings [JSE:IMP] to pay $28.3m in outstanding royalty payments, which the platinum miner is disputing, state media reported on Monday.

The state-owned Herald newspaper said Zimbabwe Revenue Authority (Zimra) had issued Zimplats bankers with a garnishee order - an order that instructs the bank to pay out of Zimplats’ funds - for the amount on November 16 2011.

The bank has since remitted $7.2m to Zimra and the high court ruled that a court application by Zimplats to force the revenue authority to return the money was not urgent, meaning it could take months for the case to be heard.

Zimra argues that Zimplats - the country’s largest platinum producer - had continued paying royalties in 2010 at a rate of 2.5% when they had been increased to 5%, the Herald said.

Zimplats officials could not immediately comment on the issue.

In his 2012 budget speech last November Finance Minister Tendai Biti doubled platinum royalties to 10% and increased the levy for gold to 7% from 4.5%.

Zimplats in 2010 said it had “grudgingly” paid $23.5 m to Zimra for outsanding profit after tax for the period 2001 to 2007. The miner had argued that it was exempted from the tax.