via Zhuwao slammed over company closure threat – NewsDay Zimbabwe March 23, 2016
YOUTH, Indigenisation and Economic Empowerment minister Patrick Zhuwao has been slammed for pushing ahead with his hardline stance of seeking to close all foreign-owned companies that would have failed to pay empowerment levies by April 1 this year.
BY NQOBILE BHEBHE
Zhuwao last week said he would not hesitate to shut down non-compliant firms when the deadline lapses.
Last October, Zhuwao said $93 million could be raised from the proposed 10% empowerment levy on companies that had not yet complied with the country’s indigenisation laws.
He said all foreign-owned companies would be levied 10% of their gross income towards the Youth Empowerment Fund and the figure would increase yearly as a way of forcing companies to cede the stipulated 51% stake to locals.
The levy, according to Zhuwao, would be part of measures to raise internal resources to fund the indigenisation programme and would be distributed through community share ownership trust schemes.
However, the opposition People’s Democratic Party (PDP) said Zhuwao’s move was “reckless” and would scare away potential investors.
“Records show that the majority of companies have failed to comply with the Indigenisation and Economic Empowerment Act as it is bad at law and at a time when companies are operating below capacity due to the harsh economic conditions,” PDP national spokesperson Jacob Mafume said.
“Zhuwao’s statement is the height of crass insanity and vindicates the PDP’s position that they are no genuine reformers in Zanu PF, but only looters and grabbers.
“The indigenisation and empowerment model will only ensure that the already corruptly rich in Zanu PF get richer and no serious businessperson will invest in this country while thousands more people will lose their jobs.”
Zimbabwe in 2008 enacted the indigenisation law to compel all foreign-owned entities to give away at least 51% of their stakes to locals, but the law has faced resistance and been blamed for low foreign direct investment.