Govt exempts Japanese firm from income tax 

Source: Govt exempts Japanese firm from income tax | The Herald March 13, 2019

Govt exempts Japanese firm from income tax

Golden Sibanda Senior Business Reporter
GOVERNMENT has exempted all expatriate staff of Japanese firm Konoike Construction Company from paying non-resident’s tax in respect of income related to infrastructure projects the firm is undertaking with funding from Tokyo’s foreign development agency.

The Japanese company is undertaking the construction of irrigation facilities; replacement and repairing of pump and flood protection structures for existing irrigation facilities at the Nyakomba Irrigation Scheme, which were damaged by floods in 2000.

Nyakomba Irrigation Scheme, which is located in the dry northern Nyanga, Manicaland Province in the eastern parts of Zimbabwe, was established in 1997 to alleviate poverty and improve livelihoods.

The project is being implemented courtesy of a US$18 million funding facility extended by Japan International Cooperation Agency (JAICA).

The repair of the floods damaged irrigation infrastructure at Nyakomba Irrigation Scheme is expected to drastically reduce the adverse impact of climate change and improve household food security in the area.

According to statutory instrument 48 of 2019, known as the Income Tax (Exemption from Income Tax) Notice of 2019, expatriate staff of Konoike is exempt from income tax on salaries and emoluments.

The exemption is in terms of provisions of the third schedule to the Income Tax Act and the effect of the declaration is that the staff of Konoike is exempt from paying non-resident’s tax on fees for jobs of a technical, managerial, administrative or consultative nature.

“The exemption is to the extent provided for in terms of the agreement signed between (the Government of) Zimbabwe and Japan International Cooperation Agency (JAICA) in November 2015.

“The exemption shall be only to remuneration of expatriate staff of Konoike Construction Company Limited, emanating from projects and programmes financed by the Government of Japan through the Japan International Cooperation Agency,” according excerpts of SI 49 OF 2019.

The Nyakomba Irrigation Scheme has already benefited many families in the Nyakomba community through poverty alleviation and food production, as it has enabled all-year round production of maize, beans and Tabasco chilli for family subsistence as well as for sale .

Nyakomba Irrigation Scheme, which is sub-divided into Blocks B, C and D measuring 430 hectares, was established with the assistance of Japan in 1997. The facility was then damaged by Cyclone Eline in 2006, rendering many aspects of the scheme inoperable.

The floods damage of 2006 resulted in pumps and canal networks failing to deliver sufficient irrigation water. Crop yields and farmer incomes fell, exacerbating rural poverty in the dry Nyanga North area.

The Nyakomba Irrigation Scheme Phase 2 Expansion Project includes the construction of pumping facilities, improving water level control, water distribution and flow measurement by building new canal structures.

Phase two also entails modifying existing canals and lining irrigation canals; farm pond, replacement and repairing of existing pumps and flood protection structures for pump stations for Blocks B, C and D that were damaged by floods in 2006.