Zimbabwe to introduce Indigenisation levy on companies
Friday, 30 April 2010 23:22
Companies with a net asset value of over US$500 000 will soon be levied to sustain the operations of the National Indigenisation and Economic Empowerment Fund and finance empowerment programmes.
NIEEF was mandated by Government to ensure full implementation of the Indigenisation and Economic Empowerment Act that seeks to ensure all major corporations are at least 51 percent owned by indigenous Zimbabweans.
Addressing journalists in Harare yesterday, NIEEF chairman Mr David Chapfika said consultations among Government stakeholders had reached an advanced stage.
“We want this fund to be the largest fund in the country and various measures are going to be undertaken to raise the funds.
“One of these measures is payment of levies by companies.
“We are going to collect levies from companies and consultations are at an advanced stage among stakeholders in Government to introduce the levy,” said Mr Chapfika.
He said the levy would be based on companies’ percentage turnover and other measures would be introduced as provided for by the law.Mr Chapfika said NIEEF would also mobilise funding through partnerships with the corporate world.
“We are also going to borrow from a purely business point of view for empowerment projects.
“The borrowing will be in the form of bills and bonds and we will be bonding specific sectors to raise the funds,” he said.
To ensure full implementation of the law and achievement of desired objectives, Mr Chapfika said NIEEF would work hard as prescribed in the law.
Mr Chapfika also unveiled 13 sector-specific board chairpersons in line with Section 7 (1) of the First Schedule of the Indigenisation and Economic Empowerment Act.
To date, over 400 companies have submitted proposals on how they intend to comply with the law.
Some of these have not met Government expectations.
A Government official yesterday said: “We have received a mixed bag of proposals. The proposals are still under consideration but I can tell you that most of the submissions from the mining sector are not pleasing.
“The companies are not explaining clearly how they intend to comply with the regulations in the next five years, an indication that they are not prepared to comply with the regulations.”
Government has extended the deadline for submission of indigenisation proposals to May 15 to allow all companies to make their submissions.
The submissions should explain how companies intend to comply with the indigenisation regulations gazetted in February.