It was a typical day in early January 2025 when the Zambian government sent shockwaves through the gemstone sector by reinstating a 15% export tax on precious gemstones. Effective January 1st, the decision came without prior warning or consultation, leaving key players like Gemfields scrambling to respond. For those closely monitoring Zambia’s gemstone export tax policies, the abrupt change felt like déjà vu—a familiar yet unwelcome twist in an already complex industry.
A Look Back: The History of Zambia’s Export Duty
This isn’t the first time Zambia’s gemstone export tax policies have stirred controversy. In 2019, a similar 15% export duty was introduced but quickly suspended after negotiations with the emerald sector. The suspension was widely seen as a win for sustainability and competitiveness. Now, with the duty reinstated, questions are being raised about its potential impact on Zambia’s position as a top global exporter of emeralds. The move has left industry leaders and stakeholders concerned about the future of the gemstone trade in the region.
How the Numbers Add Up
Understanding the backlash requires a closer look at the financial impact of Zambia’s gemstone export tax. Before the reintroduction of the export duty, Kagem—a major emerald mine co-owned by Gemfields and Zambia’s Industrial Development Corporation—was already subject to a 6% mineral royalty tax and a 30% corporation tax. With the additional 15% export duty, the effective tax on revenues now stands at 21%, excluding corporation tax.
In comparison, Brazil and Colombia, two other major players in emerald exports, impose significantly lower taxes. Their aggregate tax rates on revenues are just 2% and 2.5%, respectively. These stark disparities raise serious concerns about Zambia’s ability to remain competitive in the global gemstone market.
Gemfields’ Response: Lobbying Against the Tax
Gemfields, a leading colored gemstone producer, is pushing back against the new Zambia gemstone export tax. The company plans to lobby the government, highlighting concerns about the potential harm to mining sustainability and foreign investment.
In 2023, with no export duty in place, Gemfields reported that Kagem contributed 31% of its revenues to the Zambian government through mineral royalties, corporation taxes, and dividends. The company argues that reintroducing the duty could jeopardize this mutually beneficial arrangement, putting both the industry and the economy at risk.
Temporary Suspension of Mining at Kagem
The timing of Zambia’s gemstone export tax couldn’t be worse for Gemfields. Just weeks earlier, the company had already suspended emerald mining at Kagem for up to six months due to an oversupply in the market. For now, operations have shifted to processing ore from existing stockpiles.
Despite the mining suspension, Gemfields ensured all employees would continue to receive their usual monthly basic salaries, in compliance with Zambian labor laws. This decision underscores the company’s commitment to its workforce, even during challenging times.
Hope for Reconsideration
There may be light at the end of the tunnel. Jito Kayumba, Special Assistant to the President on Finance and Investments, hinted at a potential reversal of the Zambia gemstone export tax. Speaking at the Future Minerals Forum 2025 in Riyadh, Saudi Arabia, he suggested the government might suspend the tax once again.
This sentiment is echoed by other stakeholders, including the Federation of Small-Scale Mining Associations of Zambia, who argue that the tax could deter foreign investment and lead to job losses. The possibility of a suspension offers hope for the industry’s recovery and stability.
What’s Next for Zambia’s Gemstone Industry?
Zambia’s gemstone export tax policies have always been a delicate balancing act between generating government revenue and maintaining global competitiveness. With the 15% duty reinstated, the industry now faces a critical crossroads.
The question remains: Will the Zambian government listen to industry concerns and prioritize sustainability, or will the tax remain in place, risking the country’s position in the global emerald market? As the story unfolds, the future of Zambia’s gemstone industry hangs in the balance, leaving stakeholders eagerly awaiting the next move.
Featured image: @eshed_gemstar via @gemfields/Instagram
Sewelo is a world where jewelry, watches, and objects come alive in a shimmering dance of fantasy. Through a literary lens, we celebrate the beauty and elegance that make these treasures more than just possessions.
