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Sharon Munjenjema
ALL firms using local raw materials are set to enjoy fiscal incentives under a new Government framework — Local Content Policy — which aims to boost company performance and productivity.
The Sunday Mail has established that the idea of fiscal incentives follows the launch of a new Zimbabwe National Industrial Development (ZNID) Policy, which aims to transform the economy through promoting value addition.
ZNID replaces the Industrial Development Policy of 2012 to 2016.
Furthermore, a $30 million facility was recently availed to the Industrial Development Corporation of Zimbabwe, as part of Government’s efforts to capacitate industry.
In an interview, Industry and Commerce Minister Mangaliso Ndlovu said the local content strategy was being pursued to ensure the success of the ZNID.
“We are emphasising the usage of local factors of production. We will have thresholds, (for example), if a manufacturer maintains, say 50 percent, local content in terms of components of a product, why can’t we give incentives, tax benefits and things like that,” Minister Ndlovu said.
“If a company reaches a higher target, they get higher incentives. We will strongly advocate that companies that have reached certain thresholds should be prioritised in incentives,
“By so doing, we are growing certain industries.”
The Minister said a Local Content Committee would be created by end of next month, to monitor developments in the market as well as recommend appropriate incentives and thresholds.
He said Government was seeking to develop and strengthen the country’s value chains.
Minister Ndlovu said ZNID, which is anchored on exports, innovation and investment, follows the expiry of the 2012-2016 Industrial Development Policy which gave birth to measures such as Statutory Instrument 64.
Through a ban on importation of selected basic commodities, SI64 protected local industries in the same fashion the current Local Content strategy aims to.
Zimbabwe National Chamber of Commerce (ZNCC) past president Dr Divine Ndhlukula commended the move on fiscal incentives, but expressed reservations on ZNID policy targets.
“Fiscal Incentives are a good move, especially if they come as tax incentives. The recent changes (Statutory Instrument 142), however, make it difficult to be sure that a 2 percent growth rate in the manufacturing sector is achievable.
“A lot of companies, I have been speaking to recently, are saying they are having challenges in accessing the adequate foreign currency from banks and we do not know how soon the situation can be resolved,” she said.
Government recently introduced outlawed the use of the multi-currency regime through Statutory Instrument 142.
Online Reporter