Empowerment board in levy blitz

>> Locals charged US$120 each, foreigners get US$520 bills
Hair salons have been reserved for locals -  Picture by Edmore Muzerengi
Hair salons have been reserved for locals – Picture by Edmore Muzerengi

THE National Indigenisation and Economic Empowerment Board (NIEEB), a statutory body which ensures compliance to the law that seeks to empower locals, last week dispatched officers to collect US$120 from local businesses operating in reserved sectors.

Foreigners in the sectors reserved for locals are being charged US$520 each.

Statutory Instrument 66 of 2013 reserved specific sectors for locals, and these intended beneficiaries are now crying foul that they are being charged to do business in areas that Government had set aside for them.

It was unclear last week if the fees had force of law via gazetting.

The reserved sectors, as from January 1, 2014, are agriculture (primary production of food and cash crops), transportation, retail and wholesale trade, barbershops, hairdressing and beauty salons, employment and estate agencies and grain milling as well as bakeries, tobacco grading and packaging, tobacco processing, advertising agencies, milk processing and provision of local arts and crafts, marketing and distribution.

Foreigners have a firm foothold in sectors that Government has ring-fenced for locals.

Businesses in these sectors were recently issued with reserved sector compliance status notices and given seven days to pay the fees or lose their operating licences.

A snap survey in the capital indicated that most hair salons and barbershops had received the compliance notices.

Last week, The Sunday Mail Business saw eight officials from NIEEB and two police officers moving around Harare’s CBD asking for payment of the fees.

NIEEB public relations and communications manager Ms Grace Tsvakanyi said: “NIEEB is currently implementing the reserved sector legislation which seeks to regulate foreign and domestic investors’ business operations within stipulated business sectors.

“The Statutory Instrument 66/13 was gazetted in 2013 in a bid to reserve specific areas of business for local investors.

“The reserved sector mainly encompasses family-owned businesses and sole-traderships. Foreign investors are encouraged to invest in the productive sectors and not in the reserved sectors.

“Currently NIEEB, is conducting inspections in the reserved sector to ensure compliance. The inspections are being done by the police officers from ZRP licensing department and officers from NIEEB.

“Indigenous businesses are required to pay US$20 application fee and US$100 certificate fee. Non-indigenous businesses are required to pay US$20 application fee and $500 certificate fee.”

She added; “The certification process is meant to differentiate the players. The certification process assists in enabling the regulators to direct foreign investors to invest in the productive sectors of the economy which require high capex and ultimately boost the economy. Currently for the certification process indigenous businesses are required to pay an annual fee of US$120 and non-indigenous businesses an annual fee of $520.

“Currently NIEEB, is conducting inspections in the reserved sector to ensure compliance. The inspections are being done by the law enforcement agents from the ZRP licensing department and officers from NIEEB in terms of sections (3),(4) and (5) of SI 66/13. Simplified, any person without a license is guilty of an offence and liable to pay a fine.”

The Empowerment Board did not say if the fees had been gazetted.

However, sources plugged into NIEEB said the fees were not gazzetted, and that even small family businesses in rural areas had to comply.

“The US$120 fee or levy is not Government gazetted but it’s one of the authority’s income-generating projects and it’s meant to go towards empowerment funding. They came up with the figure after considering a lot of things like compliance and application fees.

“The blitz is compulsory to every single business and individuals operating in rural areas, towns and cities within the reserved sectors.”

SI 33 of 2013 states that any officials from NIEEB and the Indigenisation and Economic Empowerment Ministry, law enforcement agents and anyone authorised by the relevant minister can access any business premises and demand whatever documentation is necessary to prove compliance with the regulations.

But locals do not understand why they have to pay to operate in sectors that are reserved for them.

“I do not understand why I have to pay when I am a citizen of this country who must be protected by the indigenisation law. This might be a ploy by some people who want to take over our businesses,” said a businessman running a motor spares company along Harare’s Mbuya Nehanda Street.

Industry representatives last week said they were not aware of the levy.

Zimbabwe National Chamber of Commerce first vice-president Mr David Norupiri said, “We have not been advised. We do not know anything about the fee. Normally when Government is doing something they advise us.”

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