via No indigenisation levy, says Nhema – The Zimbabwe Independent. 13 June 2014 by Kudzai Kuwaza
INDIGENISATION minister Francis Nhema says there will be no indigenisation levy contrary to reports that his ministry was mulling its introduction.
Reports that another levy was being introduced had sparked fears that this would lead to further erosion of workers’ incomes already burdened by various taxes and levies.
“There is no intention by Cabinet to introduce an indigenisation levy,” Nhema said in an interview with businessdigest on Wednesday. “The country has too many levies and it is not appropriate as of now to bring more levies.”
He bemoaned the multiplicity of pronouncements on the ministry’s indigenisation policy that have created confusion.
Nhema said there were “too many cooks” when it came to the interpretation of the policy.
“If one wants to seek clarity on the indigenisation policy, they should come to the ministry,” Nhema said.
He said if there were to be any changes or amendments to the policy, he would be the one to announce them.
He said the National Indigenisation Economic Empowerment Board (Niebb), which in 2008 was established through an Act of Parliament — Indigenisation and Economic Empowerment Act (Chapter 14.33) — has been tasked with finding ways to get funding through vehicles such as pension funds.
Nhema said Niebb was underfunded, adding efforts were being made to assist the fund.
On fears that the minister could abuse his powers when it came to determining empowerment implementation deadlines for various sectors such as manufacturing, Nhema said he could not make unilateral decisions without consulting various stakeholders.
“Those fears are unfounded. I have to consult various stakeholders and make a decision on the facts presented to me,” Nhema said.
He said the indigenisation law was “investor-friendly” on the 51/49% shareholding for businesses based on the country’s natural resources such as mining.
“The law is very investor-friendly because the law gives a maximum of 49% of our natural resources to foreigners,” he said. “Are you saying that it is not investor friendly when a person will own 49% of our fisheries, when a person will own 49% of our plantations’ and when a person will own 49% of our gold and our platinum? It is very generous.”
He said the policy compared favourably to other countries which collected 70% in taxes leaving foreign investors with just 30%.
Nhema said of the 61 Community Share Ownership Trusts (CSOTs) set up, only 15 were up and running with the remaining 46 still in their formative stages as they were still to get seed capital.
Community Share Ownership Trusts are a vehicle for participation in shareholding in various businesses by communities. The proceeds from such participation must be properly accounted for and used in projects which benefit communities.
Nhema said there was a need to focus on creating new companies instead of merely indigenising existing ones
COMMENTS
He said the policy compared favourably to other countries which collected 70% in taxes leaving foreign investors with just 30%.
Where?? At Least they retained their investment, didn’t have a non contributing fat cat as a free loading partner who has a huge salary with perks.
49% of natural resources would be ok if the investor could own 100% of their company!!
I don’t agree with this policy because it discourages investors from coming in but most of all it is being used to disenfranchise Minorities.
How do you rate the credibility of the minister of theft in a government of thieves?
Firstly Mr Nhema it is not for us to come to your ministry to find out what the policy is, but for you as the minister to clearly enunciate what the policy is. Secondly how does he expect investors who bring in 100% of the funding to give away 51% of the equity often to people who know little of how to operate the business. Thirdly the investor doesn’t have the controlling interest of his own company. Only someone who is clueless about business will think this is a good deal.
Honorable Minister, your facts are wrong, the highest corporate tax rate in the world is 40%-Bangladesh!Which planet are you on? I suppose as usual with you idiots in some other universe!
Whats this story of of locals applying to trade in reserved sectors,Then whom are these sectors reserved for? $20 is too much and for what,In Vic Falls self-styled war vets are forcing indigenous firms to pay or they come and make noise at your doors!Please clarify this policy
And that 40% is a tax on profits, not a confiscation of capital.