Mthuli Ncube targets US$1bn from Cannabis Levy

THE Government will next year introduce a Cannabis Levy as it angles to tap into the envisaged boom in the production of the crop in the country following the decision to legalise and commercialise its farming.

Cannabis production was legalised in Zimbabwe through Statutory Instrument 62 of 2018 (Dangerous Drugs - Production of Cannabis for Medicinal and Scientific Use Regulations) with production solely meant for medicinal purposes only.

Cannabis is used by leading pharmaceuticals the world over in the manufacturing of drugs and provides Zimbabwe with a potentially huge foreign currency earning product at a time Government is seeking ways of boosting its export earnings.

Over 30 farmers have so far been granted licences to produce the herb and Government estimates that the sector could earn up to US$1,25 billion in exports in 2021 and thus becoming one of the leading single foreign currency earners in the country.

In his 2021 National Budget Statement presented last week, Finance and Economic Development Minister Professor Mthuli Ncube, said Zimbabwe stands to immensely benefit from the export of cannabis.

"Cannabis (mbanje/imbanje) production has immense potential to generate export receipts and tax revenues. The potential value of cannabis exports for medicinal purposes is estimated at about US$1, 25 billion for the year 2021," said Minister Ncube.

"In recognition of the immense benefits that can accrue to the country from cannabis exports, Government promulgated legislation to govern the production, procurement, distribution, possession, sale, provision and transportation of the crop.

"I, therefore, propose to introduce a Cannabis Levy, chargeable on the value of exports, at the following varied rates of tax that correspond to the level of processing: 10 percent on the export sales value of finished packaged medicinal cannabis oils that are ready for resale, 15 percent on the export sales values of bulk extracted medicinal cannabis oils that require further processing and/ or packaging and 20 percent on the export sales value of dried medicinal cannabis flowers," he said.

The Zimbabwe Prisons and Correctional Services (ZPCS) is one of the first organisation that has already begun production with at least 10-hectares under cannabis.

According to Grand View Research - a leading business consulting firm that offers action-ready market research reports, custom market analysis and consulting services, the global legal cannabis market is expected to reach US$73, 6 billion by 2027 and Zimbabwe has already begun to take steps at capitalising on this envisaged global growth.