AAG to engage other business associations over tax exemption lobby

AAG1Oliver Kazunga Acting Business Editor
THE Affirmative Action Group (AAG) has resolved to engage other business associations in Bulawayo over its proposal to lobby the Government to temporarily exempt struggling companies from remitting some taxes.
The engagement is aimed at guaranteeing a collective approach on matters stifling the competitiveness of local industries.
Last year, the economic empowerment lobby said it intended to meet Finance and Economic    Development Minister Patrick Chinamasa after the presentation of the 2014 national budget to lobby him to give ailing firms a moratorium on tax to promote industrial recovery.

AAG national vice-president Sam Ncube said his organisation on Wednesday night resolved to engage other business associations in their quest for temporary tax exemption.

“As an executive committee, we met last night and we have resolved to engage other business organisations in our request to government to have ailing companies receive a moratorium on meeting tax obligations to the Zimbabwe Revenue Authority (Zimra).

“We have since realised that for something to have weight, as AAG we have to involve other stakeholders such as the Association for Business in Zimbabwe, the Confederation of Zimbabwe Industries, and the Zimbabwe National Chamber of Commerce, among others,” he said.

He said AAG was receiving calls from businesses that were behind in terms of meeting their statutory obligations like sales tax and Pay As You Earn resulting in them failing to renew their tax clearance certificates.

In December last year, Zimra launched a blitz on tax evaders in Bulawayo imposing stiffer penalties.
The empowerment group noted with concern that if government waits for such companies to meet their tax obligations with Zimra, this will worsen their viability at a time when the revival of industries was critical.

Due to liquidity constraints, antiquated machinery, power shortage and competition from cheap imports, local industries were struggling to stimulate productivity to competitive levels.

Before the liberalisation of the economy and adoption of the multicurrency system in February 2009, the manufacturing sector was operating at an average of 10 percent capacity utilisation with government setting a target to achieve 60 percent capacity utilisation by the end of the same year.

However, the manufacturing industry which requires an estimated US$2 billion working capital to recover is yet to raise productivity to 60 percent. According to the Confederation of Zimbabwe Industries (CZI), the manufacturing sector last year recorded a 39, 6 percent capacity utilisation compared to 44, 2 percent in 2012.

The industrial representative body attributed the decline in capacity utilisation levels among other fundamentals to liquidity crunch in the economy, power shortage and obsolete equipment.

 

You Might Also Like

Comments