‘Realign investment laws’

via ‘Realign investment laws’ – NewsDay Zimbabwe November 25, 2015

THE government should put in place policies that improve the ease of doing business in the country, as well as restore confidence for both local and foreign investors, stakeholders said in their submissions to the 2016 National Budget.


Zimbabwe Congress of Trade Union (ZCTU) president, George Nkiwane said there was need to reform the licensing processes and reduce multiplicity of levies and authorities. He said the government needed to relook several pieces of legislation including the Exchange Control Act, Zimbabwe Investment Authority Act, Securities Exchange Act, Local Authority Act, Immigration Act and Environmental Act.

“While the exchange control and the Zimbabwe Stock Exchange set foreign investor participation in local entities at between 40%-100% the, Zimbabwe Investment Act and Indigenisation Act provides a threshold of 49%,” Nkiwane said.

“Such fragmented pieces of legislation create administrative challenges and send conflicting information to potential investors and, hence, the need to synchronise them and set an investor friendly environment.”

He said the budget’s priorities should be based on the attainment of socio-economic rights. Nkiwane said there was need to simplify personal and corporate tax systems by reducing the number of tax rates and tax relief measures creating a system with low rates and broad base.

The Confederation of Zimbabwe Industries, in its submission for the budget, said there was need to review, rationalise and simplify all licensing arrangements to both lower the cost and simplify business processes.

“We recommend that government accelerates the implementation and operationalisation of the National Competitiveness Commission in order to address the high cost environment and other issues as identified in the study by the Ministry of Industry and Commerce,” the business lobby group said.

CZI said national level negotiations should be replaced by plant level ones related to productivity. The group said guidelines should be given on arbitration, which specifically state that wage increases should be productivity based.

“We recommend that the following three issues are of concern to industry to be dealt with namely, retrospective application of the law, which appears to be unconstitutional, treatment of benefits prior to dollarisation and dismissal of employees due to misconduct — according to the new law, the dismissed employee is entitled to retrenchment benefits,” CZI said in its submission for the budget.

Zimbabwe Commercial Farmers’ Union president, Wonder Chabikwa said the agriculture sector required $2 billion for retooling, machinery and irrigation upgrades.

He said there was need to consider the the removal of Value Added Tax on electricity, water and other primary products for the agriculture sector.

“We are also looking at the land tax and levies that are very high and should be reduced in view of the prevailing situation in the sector and can be reviewed upwards when things improve,” Chabikwa said.

He said farmers were proposing taxes of 25 cents and 50 cents per hectare for cattle ranching and 50 cents and $1 per hectare for crops.

Chabikwa said cattle ranching face challenges of foot and mouth outbreaks, while crop yields have been on a decline.

Commercial Farmers’ Union spokesperson, Olivier Hendrik said farmers were looking forward to the introduction of incentives in the coming budget, as the business operating environment was not conducive.

“We need incentives as farmers, we need cheap fuel and fertilisers. We are also looking for the provision of compensation for farmers in this budget for farmers who lost their land in the past 15 years,” he said.

Finance minister Patrick Chinamasa will present the 2016 National Budget tomorrow amid expectations that the economy would grow by a modest 2,7% while the projected budget is around $3,85 billion.