Zambian Government Withdraws Export Tax On Gemstone After Two Months

By Linda Soko Tembo

The Zambian government has announced the suspension of the 15% export tax on gemstones and precious stones, just two months after it became effective, sparking widespread debate across the country.

Zambia is the second-largest producer of emeralds, following Colombia, with Kagem Emeralds Mine—majority-owned by the London-based Gemfields Group—being the largest precious metal mining company in the country.

In a statement issued on Tuesday, February 18, 2025, Dr. Situmbeko Musokotwane, Minister of Finance and National Planning, announced that this policy would make Zambia’s precious stones and metals more competitively priced on the international market.

“The measure will also foster increased investment in the exploration and extraction of precious stones and metals, reducing the country’s reliance on traditional mineral exports for foreign exchange earnings,” Musokotwane stated.

However, analysts are questioning whether the government’s decision is in response to Gemfields’ move to suspend operations at its Kagem mine in Lufwanyama, citing an “oversupply” of gemstones on the international market in December 2024.

This decision came just weeks before the 15% export duty on precious metals was implemented by the government.

Kagem Mining Limited is 75% owned by Gemfields and 25% by the Zambian government through the Industrial Development Corporation.

Sean Gilbertson, CEO of Gemfields, expressed gratitude for the government’s swift response.

“We sincerely thank President Hakainde Hichilema’s government for its prompt and impressive action in addressing the 15% export duty on precious gemstones,” he said.

Gilbertson emphasised that Zambia’s emerald sector has seen remarkable growth over the past 16 years and is now, by a significant margin, the world’s largest emerald exporter.

“The government’s collaborative approach and decisive action demonstrate its commitment to fostering growth and job creation for Zambia. This step puts our industry back on track to continue that trajectory,” he added.

Meanwhile, Victor Kalesha, president of the Emerald and Semi-Precious Stones Mining Association of Zambia (ESMAZ), welcomed the government’s decision to withdraw the gemstone export tax.

He expressed that this wise decision would undoubtedly boost investor confidence, promote sector sustainability, and contribute to the country’s economic growth.

“The Ministry’s prompt response to our concerns about the 15% gemstone export tax has saved the industry from potential collapse and demonstrated the government’s commitment to fostering a conducive business environment. We appreciate the Ministry’s willingness to engage with stakeholders and understand the tax dynamics that can hinder sector growth and investment,” Kalesha said in a statement.

Musokotwane emphasised that the government will closely monitor the impact of this measure using existing monitoring tools to ensure the anticipated benefits are realized.

He reassured the nation of the government’s commitment to implementing policies that foster sustainable growth, promote diversification within the mining sector, and enhance the overall well-being of local businesses within Zambia’s broader economy.

He added that the initiative would boost mineral production and, in turn, increase Zambia’s foreign exchange earnings through diversified exports. The suspension is also expected to have a positive ripple effect on the economy, attracting both local and international investors to Zambia’s mining sector.