Empowerment levy on the cards
21/06/2012 00:00:00
by Business Reporter
ZIMBABWE is set to introduce an indigenisation levy with all companies
expected to pay the new tax, a senate empowerment report has revealed.
The report tabled in the senate on Tuesday added that the introduction of
the levy is a requirement of the country’s empowerment law. The Finance
Ministry was said to be responsible for the gazetting of the levy.
“The National Indigenisation and Economic Empowerment Board also indicated
that it had been unable to collect the Indigenisation and Empowerment levy
from all companies operating in Zimbabwe in terms of Section 17 (1) of
Indigenisation and Economic Empowerment Act,” reads part of the report.
Under the country’s economic empowerment legislation, foreign companies are
required to transfer control of 51 percent their Zimbabwe to locals.
The levy is one of the ways through which the government hopes to raise
funds for the acquisition of shares in the foreign companies with the bill
estimated to run into billions of dollars.
Meanwhile the report also expressed concern over the disbursement of the
government’s Youth Development Fund which is being handled by CABS bank.
Some 162,816 applications for funding had been received by February this
year but only 76 have been approved to date with US$99,206 so far released
at an average loan size of US$3,400.
Legislators also expressed concern over the fact that most of the
beneficiaries were from Harare but CABS officials have since pledged to
ensure that at least US$1 million is allocated to each province.
The report also commended the structure of the indigenization programme
under which shares are allocated to employee and community trust schemes.
Part of the shareholding making up the 51 per cent threshold is also
allocated to the National Indigenisation and Economic Empowerment Fund as
well as an envisaged Sovereign Wealth Fund.