MINERAL AND PETROLEUM RESOURCES ROYALTY
What is it?
In the past, mineral and petroleum resources were privately owned, meaning that payment for the extraction of these resources was payable to the State only under certain circumstances, e.g. where mining had been conducted on State-owned land.
To bring South Africa in line with prevailing international norms, the Department of Minerals and Energy promulgated the Mineral and Petroleum Resources Development Act, 2002 (MPRDA)
in terms of which these resources are recognised as the common heritage of all the people of South Africa with the State as custodian thereof for the benefit of all South Africans.
The royalty is triggered on the transfer of a mineral royalty extracted from within the Republic. As is the case for all other taxes, duties, levies, fees or money collected by SARS, the royalty collected is paid to the National Revenue Fund.
Who is it for?
The following persons must register for the payment of the royalty to SARS:
- Any person who holds a prospecting right, retention permit, exploration right, mining right, mining permit or production right or a lease or sublease in respect of such a right; or
- Any person who wins or recovers a mineral resource extracted from within the Republic.
What steps must I take?
An application form MPR1
must be completed. It is available below and can also be obtained at any SARS branch. Once completed, it must be scanned and emailed to firstname.lastname@example.org
What is the rate for the royalty?
The rate for the royalty is determined according to a formula contemplated in subsections (1) and (2) of section 4 of the Mineral and Petroleum Resources Royalties Act, 2008 and differentiates between the refined and unrefined conditions of the mineral resource, and are currently as follows –
- for refined mineral resources: the minimum of 0.5% to a maximum of 5%
- for unrefined mineral resources: the minimum of 0.5% to a maximum of 7%.
When and how should the royalty be paid?
Each payment must be accompanied by a completed MPR2
payment advice form.
The payment advice can be obtained below . Do not submit an MPR2
if there is no payment to be made.