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THE prevailing cash shortages in the economy seem to have limited local companies’ capacity to take advantage of several fiscal and trade policy measures introduced by the Government this year, a senior official said.
Fiscal policy measures deal with taxation and Government spending, which are administered to monitor and influence the economy. Trade policy measures are a set of rules and regulations intended to change international trade flows, particularly to restrict imports.
According to a recent update by Zimbabwe Revenue Authority acting commissioner general Mr Happias Kuzvinzwa, it appears that few companies have been utilising the various rebates on offer.
“A rebate of duty was granted in imported capital equipment valued at $1 million and above.
“The targeted beneficiaries are mining, agricultural, manufacturing and energy generation or distribution sectors, and it’s an incentive to support industry retooling and competitiveness.
“So far, 20 companies have utilised this rebate and have brought in equipment worth $61 million,” he said last week.
Mr Kuzvinzwa also said that from January this year to date, a total of 16 companies managed to utilise the rebate on duty on capital goods imported by tourism operators, importing goods worth $14 million.
And also remaining in the tourism sector, nine companies are said to have utilised the suspension of duty on motor vehicles imported by safari operators, bringing in goods valued at $908 538.
The suspension of duty on motor vehicles was done to enable safari operators to replace an ageing fleet of game drive vehicles.
There also seems to be limited utilisation of the suspension of duty on wheat flour.
Said the acting commissioner general:
“This was done to enhance capacity utilisation of the milling industry. The suspension is for the importation of flour for blending purposes . . . To date, a total of four companies have utilised the suspension and they have imported wheat flour with a value of $3 million.”
Analysts say due to the state of the local manufacturing and services sector, the utilisation of these rebates should be higher in view of the great extent of antiquated machinery currently being used.
And the main reason for this ‘under-utilisation’ could be the liquidity crisis. Business lobbyist, the Zimbabwe National Chamber of Commerce (ZNCC) has called for broader economic reforms to deal with the cash shortages and overall economic underperformance.
“With uncontrolled spending having seen the domestic debt reaching $3,7 billion in October, this is clearly unsustainable and cannot be addressed by merely introducing a quasi-currency to increase money supply.
“Key economic reforms need to be implemented. Any economic strategies initially contemplated must address key structural problems of low productivity, negative growth, corruption and public financial mismanagement including addressing the national debt,” said the ZNCC. — BH24
Online Reporter