via Zhuwao tax ‘idiocy of the highest order’ – NewZimbabwe 05/10/2015
THE opposition MDC party has rejected as “unconstitutional and idiocy of the highest order” a proposal by President Robert Mugabe’s nephew and empoerment minister to force a 10 percent empowerment tax on foreign companies.
“This attempt to milk the few companies that remain operational in the country is daylight robbery which should not be allowed to see the light of day,” the party said in a statement Monday.
“It is yet another example of the appalling ‘economic stewardship’ of the Zanu PF government. This ill-advised idea must be dismissed with the contempt it deserves.”
The government’s empowerment programme, under which foreign firms must transfer 51% ownership to black Zimbabweans has stalled in part because of the lack of financing for the acquisition of the shareholdings.
Under the Indigenisation and Economic Empowerment Act passed in 2008, the minister of youth and empowerment can, with the approval of the finance minister, levy a tax on any company to raise money to fund the black economic empowerment programme.
Youth and Empowerment Minister Patrick Zhuwao told the state media that he would propose a 10 percent levy on all foreign-owned firms that have not complied with the law, known locally as indigenisation.
But the Welshman Ncube led MDC party said the proposal was “not only unconstitutional but idiocy of the highest order”.
“We advise the Zhuwao that that taxing people to oblivion will not achieve any gains as long as there is low economic activity in the country,” the party said.
“Imposing more taxes, dubious ones at that, on already distressed companies will only cause the economic situation to get worse.”
The country’s economy continues to struggle with the government’s ZimAsset blueprint failing to make an impact despite promises of a boom by President Robert Mugabe while campaigning for re-election in 2013.
Opposition parties saying Mugabe’s Zanu PF, bitterly divided and consumed by disagreements over his succession, has run out ideas on how to right the faltering economy.
“The Zanu PF government has proved beyond doubt that the only area it excels in is in squeezing every cent out of the suffering Zimbabweans rather than creating a conducive environment for economic empowerment,” said MDC spokesman Kurauone Chihwayi.
“More than two years after the 2013 general elections Zimbabweans still wait with bated breath for the 2.2 million jobs it promised.
“With such poor ideas coming from President Robert Mugabe’s so called ‘thinkers and advisers’, we do not foresee a single job being created by the intellectually bankrupt government anytime soon.”
Critics say the indigenisation is scaring away much-needed foreign investment, but Zanu PF insists that the programme is necessary to economically empower the country’s previously marginalised black majority.
But the MDC said “genuine empowerment” could only be achieved “through a reconstruction of Zimbabwe”.
“We are convinced that creation of investment friendly policies that encourage foreign direct investment is of paramount importance for economic prosperity in the country,” the party said.