The government of Zimbabwe has temporarily suspended the 15% tax it had imposed on sale of diamonds, according to reports appearing in the Zimbabwe press. The decline in production locally and the drop in diamond prices were cited as reasons by the government, which said it hoped that the move would improve the viability of the mining industry.

The announcement came in a letter written to the International Monetary Fund (IMF) written by Finance Minister Patrick Chinamasa and Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya.

In the document, dated April 17, and subsequently posted on the IMF website, they said, “We have temporarily suspended the collection of the special dividend on diamond sales on the back of the drop in production and adverse price developments."

It may be recalled that in October 2014 the Zimbabwe government had announced the imposition of the tax and proposed to collect it with retrospective effect from April of that year. Many mining companies had criticised the decision, and some had even said it may force them to shut operations.