ZimTrade hails new export incentives

Source: ZimTrade hails new export incentives | Herald (Business)

DRC provincial economic and commerce Minister Céline Munanga and some officials tour one of the 25 Zimbabwean stands at the ZimTrade facilitated DRC mission in Lumumbashi this week

Business Reporter
New export incentives announced by Government a week ago are a welcome development as they will improve the operating environment for exports, Zimtrade chief executive officer Allan Majuru has said.

Last week Government announced a new set of export incentives meant to promote economic growth through driving exports, diversification and competitiveness.

Part of the incentives will see exporters retain a higher percentage of their incremental export earnings while expenditure incurred by a company on trade promotion activities will be tax deductible and exporters can claim the double amount used.

Exporters, including horticulture farmers, currently keep 60 percent of their foreign earnings in hard currency, while 40 percent is sold to central bank at the official exchange rate.

Mr Majuru said the announcement of the new incentive comes at a time when Zimtrade is increasing export promotion activities to ensure stronger linkages between Zimbabwean exporters and buyers from the region and beyond.

“These activities will make it easy for local exporters to increase the visibility of their products across borders,” he said.

Mr Majuru and ZimTrade chairperson Mrs Clara Mlambo are currently out of the country on trade promotion missions in Dubai and DRC.

Mr Majuru is in DRC leading an outward seller mission while Mrs Mlambo is with another team in Dubai.

Such trade promotion missions will go a long way if exporters are supported by an enabling operating environment including export incentives as recently announced.

The set of new incentives, according to Mr Majuru, are indicative of the commitment by the Government to make it easy for local companies to export.

He said previously, one of the challenges faced by exporters was the cost of developing new markets but the focus now is making it as cost effective as possible for local businesses to develop new markets.

“As a result of these incentives, every cost incurred by a company on trade promotion activities will be tax deductible and exporters can claim the double amount used.

“In practice, local exporters will be paid to develop new markets. What this means is that local exporters will find it easy to develop new markets, in line with the National Export Strategy, which seeks to diversify Zimbabwean export markets,” he said.

Mr Majuru said the other incentive is on retention of export proceeds which makes it easy for them to plan their finances over longer periods of time.

The Minister of Foreign Affairs and International Trade, Dr Frederick Shava, recently announced plans to develop new markets and facilitate more trade missions in the coming few years.

“With the continued pursuance of economic diplomacy by Government and the coming in of African Continental Free Trade, local companies have at their disposal, an improved enabling environment to do exports,” Mr Majuru added.