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'Zisco demise costing Zimbabwe US$400m annually'

by Staff reporter
27 Sep 2019 at 07:15hrs | Views
ZIMBABWE is losing about US$400 million annually through importing steel and related products since the collapse of Zisco in the last decade, Industry and Commerce Minister, Mangaliso Ndlovu, has said.

Addressing delegates at the Employers' Confederation of Zimbabwe (Emcoz) annual congress in Bulawayo yesterday, Minister Ndlovu said urgent steps were needed in investing and developing anchor industries for strategic sectors.  

The country's largest steel manufacturing company, Zisco, shut down operations in 2008 at the height of hyperinflation.

"Ziscosteel is very important to the economy of Bulawayo. So, our steel manufacturing has to come first. Since the demise of Ziscosteel, on average we are importing up to US$400 million worth of steel and steel products," said Minister Ndlovu.

He said due to Zisco's closure, the foundries that existed in Bulawayo and the country at large were lying idle as Zimbabwe relies on imported raw materials.

"It's important that we focus on developing anchor industries from which other industries will be developed or revived," the Minister said.

To foster the growth and development of anchor industries, Minister Ndlovu highlighted the need for Government to give appropriate fiscal incentives that would propel economic growth.

He said such incentives should not be given willy-nilly but based on the direct linkage to the benefit that anchor industries would bring in driving economic growth.

"We want to isolate value chains that can give us greater value particularly when it comes to import substitution, exports and employment creation then we can discuss how best to support these value chains," Minister Ndlovu said.  

"Value chain development is very important towards development of anchor industries."

The Minister said implementation of the Special Economic Zones (SEZs) concept in designated areas across the country was underway.

"Under the SEZs, investors are still to fully tap into the benefits that are coming with this programme," he said.

In the 2019 mid-term monetary policy statement, Finance and Economic Development Minister Professor Mthuli Ncube said non-exporting firms will not be entitled to benefit from tax incentives under SEZs unless they met conditions prescribed in the Income Tax Act.

Government has availed a number of tax incentives under the SEZs model for the benefit of companies engaged in export-oriented industrial operations.

Some of the tax incentives to be enjoyed by firms operating under SEZs include; exemption for the first five years of operation and a corporate tax rate of 15 percent applicable thereafter, non-residents withholding tax on fees, and non-residents withholding tax on dividends.

Prof Ncube said from the foregoing, mining houses and other companies that produce for the domestic market cannot benefit from tax incentives under SEZs.

In addition to ensuring conformity to the constitutionally enshrined principles of fair taxation and for purposes of transparency and accountability, the Finance and Economic Development Minister said tax incentives shall be solely promulgated through the relevant tax legislation.

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Source - chronicle