Govt gazettes law for SEZs rebates

Source: Govt gazettes law for SEZs rebates | The Herald May 30, 2017

Business Reporter
GOVERNMENT has gazetted regulations allowing investors operating in Special Economic Zones to be exempt from paying duty on imported capital equipment, materials and products.

Notably, the provisions state that no company or organisation, to which a rebate on duty was granted, shall sell such material, product or equipment within five years without approval by authorities or the payment of appropriate duty.

Statutory Instrument 59 of 2017, known as Customs Excise (Special Economic Zones) (Rebate) Regulations provides for rebates on raw materials, intermediate products and machinery imported with the sole purpose of using them in SEZs.

The duty rebates are subject to approval by the Zimbabwe Revenue Authority after production of a valid investment licence, evidence that the SEZ is not in an industrial park and particulars of the material, equipment or product to be imported.

“The chief executive officer or other responsible officer of a company or organisation operating in the special economic zone importing the goods in terms of this section shall make a declaration that the goods being imported will be used solely in a special economic zone,” reads part of provisions of SI 59 of 2017.

The rebate on material, equipment or goods for use in SEZs, the regulations say, shall only be granted for particular equipment once in five years, or approved by the revenue authority.

President Mugabe signed the Special Economic Zones Bill into law in November last year in a move expected to make Zimbabwe more attractive to domestic and foreign direct investment.

Zimbabwe, which possesses better attributes, realised about $420 million in FDI last year compared to upwards of $2,5 billion for neighbours such as Mozambique and Zambia.

The Special Economic Zones Act provides the framework for establishing SEZs, the appropriate regulatory structures and policy infrastructure to support flourishing local and regional trade.

Investors in SEZs will enjoy both fiscal and non-fiscal incentives. Non-fiscal incentives will entail automatic work permits for investments valued more than $15 million and 5 days work permit processing for investments below $15 million.

Fiscal incentives will include zero-rated corporate income tax for the first five years, zero -rated capital gains tax, duty free importation of capital equipment, provision for 100 percent capital repatriation and duty free importation of inputs and raw materials meant for operations undertaken in approved SEZs.

Overall, deputy chief secretary to President and Cabinet Dr Ray Ndhlukula said recently that the ultimate goal of establishing SEZs in Zimbabwe was to create better conditions for investment and business operations in the country compared to what is prevailing in other sectors of the economy.

This is over and above reforms Government is undertaking to improve doing business conditions with key milestones having already been achieved through the 100-day rapid results initiative, spearheaded by the Office of the President and Cabinet.