Staff Writer 
Simbarashe Hamudi
ZIMBABWE has introduced a significant reform to its transfer pricing regime through the amendment of the Thirty-Fifth Schedule to the Income Tax Act.
With effect from January 1, 2026, the amendment modifies paragraph 4(5) of the Schedule by inserting a new paragraph (f), which mandates the use of the Quoted Price Method for the pricing of minerals exported from Zimbabwe.
The change represents a decisive policy shift aimed at strengthening transparency, curbing revenue leakages, and ensuring that mineral exports are valued in accordance with internationally recognized market benchmarks.
The newly inserted paragraph provides that, in respect of the pricing of minerals exported from Zimbabwe, the Quoted Price Method must be applied, adopting the reference price prevailing at the active market. This means that exporters are now legally required to base their pricing on established international commodity exchange prices rather than relying solely on internal group pricing arrangements or negotiated contract values that may not reflect arm’s length standards.
The amendment further defines what constitutes a “reference price” for purposes of applying the Quoted Price Method. The primary benchmark is the monthly average London Metal Exchange (LME) cash price. Where a particular base metal or precious metal is not quoted on the LME, the law provides that the monthly average Fastmarkets Metal Bulletin cash price shall apply. If the metal is not quoted on either the LME or Fastmarkets Metal Bulletin, then the monthly average Shanghai Metals Market (SMM) cash price becomes the applicable benchmark. In cases where none of these exchanges quote the relevant metal, the Commissioner is empowered to approve the use of the monthly average cash price from any other recognized metal exchange market.
In addition, the amendment recognizes commercial realities in mineral trading by allowing for adjustments to the benchmark price. Specifically, the law permits the use of the average monthly benchmark price less any discounts attributable to proof, low quality, or grade.
This provision acknowledges that mineral products vary in purity and composition, and that treatment and refining charges or quality penalties are common features of international mineral sales contracts.
By incorporating this flexibility, the amendment seeks to balance strict pricing oversight with the operational dynamics of the mining industry.
The introduction of the Quoted Price Method comes against the backdrop of longstanding concerns about transfer pricing practices in the extractive sector. Transfer pricing involves the pricing of transactions between related parties within the same corporate group.
While legitimate when conducted at arm’s length, such arrangements can be manipulated to shift profits to jurisdictions with lower tax rates. In resource-rich economies like Zimbabwe, under-invoicing of mineral exports or mispricing in related-party transactions can significantly erode the domestic tax base.
Mining remains one of Zimbabwe’s most important economic sectors, contributing substantially to export earnings, foreign currency inflows, and government revenue. Commodities such as gold, platinum group metals, lithium, chrome, and nickel are central to the country’s economic performance. Ensuring that these resources are exported at fair and transparent prices is therefore a matter of national fiscal importance. By tying export prices to globally recognized benchmarks, the Government aims to minimize disputes over valuation and reduce opportunities for aggressive tax planning.
From a compliance perspective, the amendment imposes new obligations on mineral exporters. Companies must now align their pricing policies, contracts, and accounting systems with the statutory requirement to use monthly average reference prices.
Detailed documentation will be essential, particularly where discounts are applied due to quality differences.
Taxpayers must be prepared to demonstrate how any deductions from the benchmark price were calculated and justified.
At the same time, the amendment may enhance certainty in tax administration.
By clearly identifying the hierarchy of pricing sources and defining the applicable methodology, the law reduces ambiguity around acceptable pricing standards.
This clarity could help prevent protracted disputes between taxpayers and the Zimbabwe Revenue Authority, provided that implementation guidelines are consistently applied.
The Commissioner’s authority to approve alternative exchange prices where necessary introduces a measure of flexibility into the transfer pricing framework. However, it also underscores the need for transparent administrative procedures to ensure fairness and predictability. Clear guidance on how such approvals will be granted will be important in maintaining investor confidence.
Ultimately, the 31st Amendment to the Thirty-Fifth Schedule reflects Zimbabwe’s
broader commitment to strengthening domestic resource mobilization and protecting revenue from the mining sector.
By mandating the Quoted Price Method for mineral exports, the Government has taken a firm step toward aligning its transfer pricing rules with international best practices and enhancing accountability in the extractive industries.
As the new provisions take effect from January 1, 2026, mineral exporters are expected to review their transfer pricing frameworks and ensure full compliance with the amended law.
The reform signals a new era in mineral export regulation one grounded in market-based benchmarks, greater transparency, and closer scrutiny of cross-border transactions.
Hamudi is Tax Partner at Baker Tilly. He can be contacted at simbarashe.hamudi@bakertilly.co.zw or / 0775 399 536
