Companies to fund Indigenisation and Economic Empowerment Board

Companies to fund Indigenisation and Economic Empowerment Board

via Companies to fund Indigenisation and Economic Empowerment Board February 10, 2014 NewsDay

THE National Indigenisation and Economic Empowerment Board (NIEEB) intends to levy all companies operating in Zimbabwe to sustain its operations in the absence of adequate budgetary support, Parliament was told last week.

NIEEB chief executive officer Wilson Gwatiringa told the Parliamentary Thematic Committee on Indigenisation and Empowerment that although the board had made proposals to levy 0,5% of annual turnover, it did not have the Statutory Instrument to collect the levy.

“We have, therefore, been dependent on fiscal budgetary allocations since inception with the result that the programme has been grossly underfunded,” he said.

In the 2014 National Budget, NIEEB was allocated $2,6 million against a bid of $10 million.

Gwatiringa said disbursements were usually different from what was allocated, adding that if the trend continues “we will get disbursement of under $1 million.”

The move to levy companies comes at there are differences in government on how the empowerment crusade would be implemented.

There is concern in some quarters that the empowerment crusade has to be implemented with the need to attract foreign direct investment in mind.

Zimbabwe is starved of foreign direct investment to help rebuild the economy which is showing signs of a slowdown despite the continued use of the multi-currency regime.

The banking sector has provided headaches to proponents of indigenisation on how it would comply with the law.

Critics have argued that the sector thrives on confidence and it is a tall order to “indigenise” deposits.

Gwatiringa told the parliamentary committee that NIEEB will continue to engage foreign owned banks.

“There are institutions that we are engaging with on how best they can comply with the law. I hope at the end of it all we will come up with a compliant industry,” Gwatiringa said.

In the period 2010-2013, NIEEB processed 1 471 indigenisation plans.

To date, NIEEB, through the National Indigenisation and Economic Empowerment Fund, holds 16% in Blanket Mine and 9,7% in Portland Holdings following the indigenisation of the two institutions. Payment for the shares would be done through forfeiting future dividends.

COMMENTS

WORDPRESS: 10
  • comment-avatar
    moyokumusha 4 years

    Gwatiringa and ZANUPF should leave the companies alone and forget the indigenisation issue. It is driving away the companies, investors and the few jobs that are still there. It is time to put your hands up and say ndatadza, sorry and time to change. By putting a levy on you are going to force more companies to close and more hardship for the nation when as the so called elected government you should be doing all you can to create national wealth and not looting for a few to benefit. Enough is enough and the people are fed up of the lies.

  • comment-avatar
    DL 4 years

    This is a real job creator! First foreign owned companies are told that they must surrender 51% of their shareholding, for nothing in return; and further, that they must pay 0.5% annual tax to NIEEB. I thought taxes could only be legislated through an act of Parliament? If a company’s annual profit is only 5% of annual sales, then that means that NIEEB would be taking 10% of their profits. That’s crazy. And that applies to ALL companies, not just the foreign owned ones. If this is implemented, not only will it further keep FDI away from this country, it will also lead to the closure of still more companies and the loss of many more jobs – and incidentally, less taxes paid to the treasury!

    There’s a reason why NIEEB and the rest of the government does not get their preferred budgetary support from Treasury. It’s because no one wants to do business with a whacky government that only seems to take, task, take, and never gives back to anyone else.

  • comment-avatar
    John Thomas 4 years

    The bottom line. These people want money and they do not want to earn it so they will steal it

  • comment-avatar
    LUCY 4 years

    Which companies are these people talking about? How many viable companies are left in Zim (dont count the hundreds facing closure) or the ones operated by any person linked to ZPF because those one do not pay their workers neither to they remit any taxes so how on earth will they fund this pipe dream? Why does Government embark on programmes that it has no money to fund any way. Very grandiose this government spouting such voluminous words in the budget which mean nothing. Who are you fooling?

  • comment-avatar
    Mutorwa 4 years

    ZANU PF CANNOT RUN A COUNTRY. THEY CAN ONLY STEAL. TELL ME, HOW MANY LEVIES DOES ZANU PF SURVIVE ON?

    SINCE THEY ARE A BEGGAR PARTY, THEY KNOW NOTHING ELSE OTHER THAN BEGGING AND STEALING. EVEN THE ZANU PF HQ WAS BUILT WITH FUNDS DONATED BY WORKERS IN THE 1980’S. BEGGED CHINA FOR THIS, MALAYSIA, GADDHAFI, LONDON ETC FOR THAT! NXAAAAAAAAAAA!

  • comment-avatar

    Let those companies that make money pay. SOME PEOPLE ARE STILL IN COMFORT. They enjoy paying. Have fun. Those who do not have money wont just pay simply because they just cant do it. We cant all steal from each other just to pay the Zanupf political program.

  • comment-avatar
    Mwanawevhu 4 years

    Ummmm zvazvakazviomera!!!

  • comment-avatar
    zimbo 4 years

    ask cashburg to fund it!!!