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Dr Desire Sibanda

Leonard Ncube in Victoria Falls
A NEW board will soon be put in place to monitor the implementation Special Economic Zones (SEZs) and respond to local industry concerns.

The Permanent Secretary in the Ministry of Youth, Indigenisation and Economic Empowerment, Dr Desire Sibanda, said this yesterday while responding to criticism from tax experts concerning the terms of SEZs.

Tax experts are meeting in Victoria Falls for a three-day tax conference, which seeks to support economic growth through smart taxation.

Participants accused Government of awarding corporate tax free tenders to foreign companies in the interest of luring investors claiming more money could be saved if the tenders are given to locals.

Said one participant: “What is the Government doing to protect local companies and why are tenders going to foreigners when actually they can be given to locals?”

Another participant, Mr Nyasha Mhungu, from Meikles queried why Government was concentrating on exempting taxes related to the Zimbabwe Revenue Authority leaving others such as National Social Security Authority and Zimbabwe Development Fund.

In response, Dr Sibanda said the motive behind SEZs was to invite expertise and technology and merging with local industry.

“The objective is to bring investors who have expertise and funding to merge with locals who have claims. Foreign Direct Investment is there to transfer technology and bring capital and expertise that is not in the country.

“We cannot say the model is biased towards foreign companies…take for example industry space in Bulawayo is now used by churches because they cannot produce what the market wants hence they need someone with expertise and technology to come in,” said Dr Sibanda.

He called for a revision of some old laws some of which make no fiscal sense, adding that the SEZs model seeks to remove local fees to allow re-industrialisation.

Participants also queried delays in implementing the SEZs model to which Dr Sibanda said they were waiting for the appointment of a board to spearhead the process.

He said there was a need to learn from countries that have grown economically through the SEZ concept, which ensures value addition for products by inviting international companies to manufacture in the country and export.

To deal with the contentious issue of numerous taxes and tossing of investors between offices, Dr Sibanda said the concept of a one-stop shop would be strengthened as Government pulls a leaf from China and the Asian Tigers, as well as countries such as Ethiopia, Ghana and Tanzania that have employed the model.

The SEZs model entails reducing corporate tax for companies that will invest in specially selected areas thereby bringing diversification, innovation and employment while addressing the problem of de-industrialisation, as well as promoting backward and forward linkages, transfer of the economy from inward to outward orientation.

Workers will also absorb new technology.

The conference ends today.

@ncubeleon