13 June 2018

Zimbabwe: Govt to Gazette Sezs Incentives

Government will in the next two weeks gazette investor incentives and regulations that will guide the functioning of the Zimbabwe Special Economic Zones Authority (ZimSeza), effectively bringing it into full operation.

In June last year, Government appointed the board of the Authority, chaired by former Reserve Bank of Zimbabwe (RBZ) governor Dr Gideon Gono, but the Authority was yet to become fully operational.

ZimSeza chairman Dr Gideon Gono said once the regulations and incentives (specifically the non-fiscal incentives) are promulgated, the Authority will begin approving projects that were on hold.

"It means that by end of this week or next week, the regulations and incentive packages will be gazetted and once gazetted, we can start approving projects, we can then begin declaring targeted areas, cities and towns as special economic zones (SEZs). Government has publicised its desire for SEZ status for Sunway City here In Msasa/Ruwa, Victoria Falls, Bulawayo and recently Mutare and Norton," he said.

"We will now, after gazetting the regulations and incentives, request investors in these places to submit specific projects that speak to the exact location of their proposed factories, business plans with projections of exports generation or level of import substitution, employment creation, technology transfers and introductions, proposed linkages with local industries and implementation time tables.

"We will look at other attributes such as proximity to raw materials or markets, road, rail or air networks, waste management programs, power and water availability, proximity to labour markets and other amenities."

ZimSEZA is incorporated in terms of the Zimbabwe Special Economic Zones Act (Chapter 14:34).

The anticipated promulgation of the regulations for the ZimSEZA falls under Section 57 of the Act, which speaks to the gazetting of regulations to guide operationalisation of SEZs.

Fiscal incentives for SEZs have already been gazetted.

In terms of the fiscal incentives that were gazetted in the Finance Act of 2017, there is zero-rated corporate income tax for the first five years of operation with a corporate tax rate of 15 percent applying thereafter; there is also a duty-free importation on capital equipment.

The other fiscal incentives include a special initial allowance of 50 percent of cost from year one and 25 percent in the subsequent two years; exemption from non-residents tax on fees for services that are not locally available; exemption from non-residents tax on fees for services that are not locally available, and zero-rated capital gains tax, among others.

"It is the bulk of the non-fiscal issues that will be gazetted within the next two weeks," said Dr Gono.

He said by last year they had put in place a Special Economic Zone revival plan for ZiscoSteel, but said approvals and certificates could not be granted without the regulations and incentives in place.

Zimbabwe's Special Economic Zones are being established to fulfil the following objectives: to restore the economy's capacity to produce goods and services competitively; to create economies of scale good enough for the locator of the proposed SEZs to be internationally competitive, and to ensure inclusive growth emanating from the spread of growth nodes and diversified provincial offerings.

They are also aimed at maximising the economic benefits of a given geographical location and its stakeholders, and attracting more investment from the International world.

Meanwhile Dr Gono said the appointment of the inaugural chief executive officer for the Authority was a key step in effectively operationalising its functions.

Earlier this year, Government announced the appointment of Edwin Kondo as the CEO of ZimSEZA, with effect from May 1, 2018.

Mr Kondo is a holder of a Masters' degree in Strategic Management, Bachelor of Science degree in Mathematics and Physics; Certified Diploma in accounting and finance (ACCA) and a National Diploma in marketing management.


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