Govt extends support for industry: More on duty free rebates

Minister Patrick Chinamasa

Minister Patrick Chinamasa

Auxilia Katongomara, Business Reporter
GOVERNMENT has extended duty free rebates for a number of industries in 2018 as part of support measures aimed at increasing domestic productivity and increasing exports.

Presenting the 2018 National Budget Statement yesterday, Finance and Economic Development Minister Patrick Chinamasa said the move was meant to consolidate gains achieved in 2017, which has seen an increase in capacity utilisation for most companies mainly in furniture, dairy, cement and tourism sectors.

“I propose to extend the list of raw materials that can be imported under the Furniture Manufacturer’s Rebate. The extension of rebate of duty has been guided by facilitating access to goods that are not produced by the local industry,” said Minister Chinamasa. He also proposed to remove mattresses from the Open General Import Licence and extended suspension of duty on imported powdered milk to 24-months to augment insufficient domestic production of raw milk. Minister Chinamasa proposed to ring-fence importation of white cement used in the production of tile adhesive by approved manufacturers at a reduced duty rate of five percent. He further proposed the removal of clinker from the Open General Import Licence to support local production and to save foreign currency with effect from 1 January 2018.

“Notwithstanding support measures availed by Government to the textile manufacturing industry, the sector continues to face competition, due to the influx of dumped cheap imported fabrics,” said Chinamasa.

For the textile industry, the minister proposed the introduction of a fabric specification declaration form that will be used in the verification of fabrics as well as increase of customs duty on cotton fabric.

He said Zimra would collaborate with the textile industry with a view to building capacity and proposed to increase customs duty on cotton fabric from 10 percent to 30 percent plus $2.50 per kilogramme, with effect from 1 January 2018.

Minister Chinamasa said production of raw wine remains insufficient to meet domestic distillers’ demand hence the proposal to increase the quantity of imported raw wine under concession from 30 000 to 90 000 litres.

He also proposed extension of rebate facility for a period of two years beginning 1 January 2018 for the luggage ware manufacturers.

“There is, however, need to extend the list of raw materials covered under the existing duty concession to take account of advances in production formulae.

The 2018 Budget, therefore, proposes to include under the rebate scheme selected inputs such as caustic soda, sodium carbonate and silicate, among other base chemicals,” said Minister Chinamasa.

He further proposed to renew the duty free importation of vehicles by safari operators for the next two years beginning January 2018.

Minister Chinamasa said the revival of the Cold Storage Company was certain after Government ceded 80 percent of its shares to the National Social Security Authority (NSSA), which will inject capital to the ailing parastatal. NSSA would bankroll resuscitation of the cattle scheme for increased beef production for domestic and export markets.

The Minister said the development of infrastructure was critical in the implementation of Special Economic Zones and attracting investors to the designated areas. Basic infrastructure includes water, power, road and rail transportation, among others. He said Treasury has received requests for funding the development of such infrastructure at Sunway City and Victoria Falls amounting to $16,7 million and was considering submissions on the Diamond Cutting and Polishing Special Economic Zone in Mutare.

The minister said Government was forging ahead with the doing business reforms under the 100 Day Rapid Results Initiative, spearheaded by the Office of the President and Cabinet, in creating a conducive investor climate. Consistent with the commitment by President Mnangagwa to speedily operationalise SEZs he said Government will engage experts with requisite expertise in the planning, design and implementation of the model. Special Economic Zones have been identified with pilot projects, in Bulawayo, Sunway City in Harare, Victoria Falls and Tokwe Mukosi. — @AuxiliaK.

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  • Tawanda

    It would be nicer to have a link to the full budget statement. There should be quite a lot the minister presented that what the reporterror is giving us.