Treasury incentivises manufacturing sector

Farirai Machivenyika

Senior Reporter

TAX incentives in support of the manufacturing sector have resulted in domestically produced goods occupying over 80 percent of shelf space in supermarkets, Permanent Secretary for Industry and Commerce, Dr Thomas Utete Wushe, has said.

Dr Utete Wushe said measures adopted by Government over the years were meant to achieve development objectives set out in local and regional policies.

“The incentives, aligned to the priority value chains, are designed to reduce the overall dependence on imports of goods we can manufacture using locally endowed raw materials. It demonstrates Zimbabwe’s desire to upscale industrialisation in line with NDS1, Vision 2030 and the Sadc Industrialisation,” he said.

Government has set a target of the country becoming an upper-middle-income economy by 2030.

Dr Utete Wushe commended the manufacturing sector for leveraging on Government incentives such as deferment of VAT, tax rebates and duty suspension, saying this had improved the financial viability, productivity and competitiveness of industrial companies.

“These measures support broader economic development, job creation and improved access to affordable goods and services. I am pleased to advise that domestically produced goods now occupy more than 80 percent of the shelf space in supermarkets,” he said.

Some of the incentives that have been instituted by Government include VAT deferment on equipment imported by specified sectors as provided for by Section 12A of the VAT Act as read with Finance Act No.8 of 2022 providing relief for periods ranging from 90 to 180 days depending on the value of the equipment with the minimum set at US$500 000.

Furniture manufacturers have also benefitted from tax rebates as set out in Statutory Instruments 3 of 2016, 158 of 2017 and 276 of 2018 and companies in the printing and packaging sector have benefitted from tax rebates through SI 152 of 2016.

SI 161 of 2016 had provided tax rebates for manufacturers of sanitary wear while companies that produced soap and cosmetics had benefitted through S1 95 of 2013 and SI 155 of 2016.

Those in the baking sector also enjoy tax rebate through S1 275 of 2018 and SI 10A of 2024.

Government had suspended imported duty on milk powder and raw cheese through S1 6 of 2021 and SI 222 of 2022 while a rebate for manufacturers of ciders has been provided for as contained in SI 63 of 2014.

Government had also provided rebates for the pharmaceutical, electrical, fertilisers, shoe, textile and clothing manufacturers.

Dr Utete Wushe urged the private sector to make use of incentives provided by Government in its efforts to grow the local industry.

“Equally, we will continue to work with investment fund managers, development banks, pension funds and investors to explore more funding opportunities for industrial growth,” he said.