Incentives for special economic zones ready

08 Apr, 2018 - 00:04 0 Views
Incentives for special economic zones ready

The Sunday Mail

Government this month unveils a package of incentives tailor-made for businesses that set up shop in soon-to-be established special economic zones (SEZs).
Authorities will gazette regulations for establishment and operationalisation of SEZs as part of the economic reform packages being rolled out to attract investment.

The Sunday Mail understands that Government has approved appointment of a chief executive officer for the Zimbabwe Special Economic Zones Authority (ZimSEZA). A board is already in place.

President Emmerson Mnangagwa has seconded two senior staff from his office to assist with setting up a secretariat, and three officials from the Industry, Commerce and Enterprise Development Ministry have also been roped into the authority.

The President has placed ZimSEZA under the administration of the Industry Ministry.

Regulations will include application procedures and requirements for setting up businesses within an SEZ.

It has been gathered that some of the incentives include corporate tax exemption for the first five years of operation and a corporate tax rate of 15 percent thereafter; while specialised expatriate staff will be taxed at a flat rate of 15 percent.

There is also scope for duty free importation of capital equipment and exemptions for non-residents withholding tax on royalties.

Raw materials and intermediate products imported for use by companies in SEZs will be imported duty-free, but the exemption will not apply where raw materials are produced locally.

ZimSEZA board chair Dr Gideon Gono told The Sunday Mail that: “I am pleased to advise that Government, in terms of section 22 of the (enabling) Act, has now cleared the board’s recommendations for a chief executive officer and I held a meeting with the selected candidate to agree on finer details of the appointment.

“He is a Zimbabwean and will commence work on May 1, 2018. The name will be announced in due course.

“As chairman, I have already held a meeting with the CEO-designate to discuss finer details of his engagement terms which the board will deliberate on soon, but I have already asked him to start arranging his relocation from South Africa back home.

“In the meantime, Government also seconded to SEZ two members of staff from Office of the President and Cabinet to assist with logistics of setting up the secretariat and three others from the Ministry of Industry, Commerce and Enterprise Development to do the same.

“In terms of ministerial reporting as required by the Act and following the reorganisation of Government under the new dispensation, I am also pleased to advise that the SEZ now falls under the Minister of Industry, Commerce and Enterprise Development, Dr Mike Bimha, effective last month.

“All these are positive developments whose absence had tended to stall the advancement of the SEZ thrust since the board’s appointment nine months ago.”

Dr Gono said the SEZ regulations and incentives packages would be ready by May, adding that emphasis would be on ensuring holistic development within the SEZs.

“We will prefer to see a structure that speaks to long-term land/premises ownership or leases, infrastructure master plans that talk to other developments around, competent developers, financiers, operators, business plans, implementation timelines, management, and what sort of national benefits are expected from each SEZ application,” said Dr Gono.

“Realistic employment creation and numbers, exports to be generated or import substitutions, value chains and linkages with the local economy as well as proposals that speak to the role of SMEs around those SEZs are some of the aspects regulations under preparation will speak to.

“Conversions of existing factories like David Whitehead and similar ones into SEZs as well as all other industrial spaces and shells that stand out as white elephants or with underutilised capacity will also be encouraged to scout out for foreign investors for joint ventures under the SEZ model.

“The idea is to make sure that underutilised industrial infrastructure is put back to full use and nothing to waste.”

Dr Gono said a comprehensive plan had been drawn up for the new CEO to urgently conduct a nationwide provincial outreach programme to discuss how each province could benefit from SEZs.

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