Govt harmonises investment laws

29 Apr, 2018 - 00:04 0 Views

The Sunday Mail

GOVERNMENT is working towards the harmonisation of investment laws as efforts to reduce bureaucracy and cut the cost of doing business in Zimbabwe gather momentum.

Zimbabwe has eight laws that govern investments, a move that is seen as increasing the cost of investment considering that statutory fees have to be paid in fulfilment of the laws.

Zimbabwe Investment Authority (ZIA) chief executive officer Mr Richard Mbaiwa, last week told delegates during the International Business Conference held concurrently with the Zimbabwe International Trade Fair that the plans are already in motion.

The move is in tandem with improving the country’s ease of doing business environment.

Said Mr Mbaiwa: “The country has a plethora of investment laws which sometimes don’t talk to each other.

“There are multiple investment approval institutions, processes and considerations. Investment rules and regulators are also fragmented.

“There is a need to remove investor facilitation bureaucratic bottlenecks through institutional reforms across the board.”

Some of the laws governing investment are the Zimbabwe Investment Authority (Chapter 14:30); the Immigration Act (Chapter 4:02); Companies Act (Chapter 24:03); the Environment Management Act (Chapter 20:27) and the Exchange Control Act.

Other laws are the Zimbabwe Revenue Authority Act; the Special Economic Zones Act; and Joint Ventures Act. Investors make enquiries to ZIA at no cost while the Registrar of Companies facilitates name search and company registration. The process takes five days to conclude. ZIA also approves investment applications. The application fee is US$500 while the licensing fee is US$2 500, and the process takes four days. For the service, the Registrar of Companies charges US$145, but it may vary according to share capital.

The Reserve Bank of Zimbabwe is also involved through its Exchange Control Division. The RBZ does not charge for the service and it takes about seven days to conclude.

Another critical institution involved in investment processes is the Immigration Control Department. The department’s major role is to receive applications for investors’ residence permits for dependants and/ or spouses.

Such applications cost US$500 and the processing is done within 21 days.

The Immigration Department also comes in to provide work permits to investors whose applications have been approved, again, the cost is US$500 and the processing takes no more than 21 days.

Mr Mbaiwa also said the Zimbabwe Revenue Authority (Zimra) is responsible for registering tax heads (tax clearance) at no charge. This takes up to two days or five minutes if done online.

The National Social Security Authority (NSSA) also registers for social security at no charge and the process can be done inside 24 hours.

The Environment Management Agency (EMA) processes applications for Environmental Impact Assessment Certificates which cost US$139.

Processing EIA certificates takes 10 days although the Act says it should be done in 20 days. The EIA report will cost the investor a minimum of US$253 for low value, low impact. According to the law, the report must be released within 60 days but in practice, it takes one month. The maximum that investors can pay for EIA reports is US$2 million.

Considering the multiplicity of institutions and laws governing investment, Finance and Economic Development Minister Patrick Chinamasa, has proposed the merging of the Special Economic Zones Authority with ZIA, ZimTrade and the Joint Venture Unit. Minister Chinamasa said a One-Stop-Shop should be established.

This decision has already been approved by Cabinet as part of measures to restructure State Enterprises and Parastatals. Government has 107 SEPs and merging some would reduce the burden imposed on fiscus by those that are perennially under performing.

In 2016, 38 out of 93 audited SEPs incurred a combined US$270 million loss due to poor corporate governance practices and ineffective control mechanisms.

The bad performance of SEPs is expected to be curtailed by the Public Entities Corporate Governance Bill whose adoption is now at an advanced stage.

Share This: