Indigenisation: Govt plans to introduce rebates

Zvamaida Murwira Senior Reporter
Government plans to introduce rebates as part of efforts to encourage companies to comply with the Indigenisation and Economic Empowerment Act, a Cabinet Minister has said.

Youth Development, Indigenisation and Economic Empowerment Minister Patrick Zhuwao, said in addition to imposing 10 percent levy on annual gross turnover for firms, the ministry also intended to introduce a system of rebates.

Minister Zhuwao said this while giving oral evidence before a Parliamentary Portfolio Committee on Youth Development, Indigenisation and economic Empowerment chaired by Gokwe Nembudziya MP Cde Justice Mayor Wadyajena (Zanu-PF).

In his evidence, Minister Zhuwao said there was rampant non-compliance of indigenisation law because of several reasons. He said his ministry came up with a raft of measures to ensure that the law was complied with.

“We are proposing an Indigenisation Compliance Empowerment levy, however, we also want to be able to put in place a system of rebates that recognises compliance with indigenisation. It will be in three categories. The first category of the rebate will be Indigenisation Legislation Compliance rebate which involves rebate of up to 90 percent. The second one will involve indigenous shareholding rebate up to a maximum 51 percent. The third level of classification of rebate would include a good citizenship rebate which will go up to 30 percent,” said Minister Zhuwao.

He said it was now up to the companies to comply and stand to win huge rebates as high as 100 percent.

Minister Zhuwao said he was aware that 10 percent levy was potentially crippling but it was critical to impose empowerment levies that were high enough to motivate firms to comply with the law.

“It is up to the individual company to decide what level of rebate they want. There is need to have an amount of levy that is sufficiently high or high enough for companies to take the legislation seriously,” said Minister Zhuwao.

He said while he agreed on the need to pursue Foreign Direct Investment, they did not necessarily lead to employment creation in sufficient levels particularly in the context of Zimbabwe’s socio economic environment.

Minister Zhuwao said through a cocktail of strategies his ministry intended to create more than 2,2 million jobs through investment at local level.

“Our overriding objective is to create over 2,2 million jobs and we believe our strategy should be coordinated at constituency level and implemented at ward level. The creation of 2,2 million jobs is a mathematical exercise which requires a creation of 5 400 jobs in every constituency which therefore means we need to create 1 350 micro level entrepreneurs,” he said.

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