Tax break for Byo investors

24 Jul, 2017 - 02:07 0 Views
Tax break for Byo investors Bulawayo Thermal Power Station

The Chronicle

Bulawayo Thermal Power Station

Bulawayo Thermal Power Station

Prince Sunduzani, Chronicle Reporter
THE Bulawayo City Council has resolved to exempt industries and investors operating under the recently approved Special Economic Zone (SEZs) from paying rates for up to five years to stimulate development and create employment.

Once the country’s industrial hub, the city has suffered massive closure of companies leaving most residents jobless.

Bulawayo Town Clerk, Mr Christopher Dube, heads an 11 member team tasked to spearhead the economic revival of the city which dovetails with objectives of the country’s economic blueprint- ZimAsset.

The SEZ established in the city specifically in the leather and textiles sector was promulgated in terms of the Special Economic Zones Act (Chapter 14:34).

According to the latest council report, to make the SEZ more attractive, the Government has announced four categories of incentives for investors which include: “Fiscal Incentives (corporate taxes, customs duty) Non-fiscal Incentives (work permits, ownership) Monetary Incentives (repatriation of dividends, borrowings), Incentives for SEZs Developers) land tenure, local government taxes and levies).”

Bulawayo councillors added their own list of incentives for manufacturing companies that set up and create employment thereby boosting economic growth.

The companies and investors will enjoy a rates rebate of up to 100 percent for five years.

“Development effected within the first year – Rebate at 100 percent for five years. Development effected within the second year – Rebate at 80 perecent for four years. Development effected with the third year – Rebate at 60 percent for three years. Development effected within the fourth year – Rebate at 40 percent for three years. Development effected within the fifth year – Rebate at 20 percent for one year,” reads the report.

Councillors also agreed that exporters on stand-alone stands and those employing more than 100 workers will enjoy a 50 percent rates holiday for five years.

The local authority resolved to allocate Industrial stands on lease with an option to purchase.

Buyers of industrial stands would be allowed to spread payment of the balance on the purchase price, after the deposit, over 24 months instead of the present 18 months.

In ensuing debate, the city’s Mayor Councillor Martin Moyo said he appreciated the idea of SEZ, adding that developers would be encouraged by the incentive to develop with an option to purchase.

The Town Clerk told councillors that SEZ would not be limited to leather and textile business.

Bulawayo’s acting deputy engineering director in charge of town planning, Mr Wisdom Siziba, said development that will be rewarded by council included any approved construction or work that would be done on approved sites.

Mr Siziba said the local authority had identified Umvumila, Nondwane near Joshua Mqabuko International Airport and two sites in Kelvin West, one near Masiyephambili Drive and another near Khami Road as sites where companies under SEZ could operate from.

The late economist Dr Eric Bloch is on record saying local authorities should be the major drivers for economic growth in any country.

He said if local authorities fail to stimulate industrial or economic growth, residents would become unemployed and fail to pay rates.

Dr Bloch said service delivery would suffer and amenities like roads, street lighting and primary healthcare services were likely to collapse.

The SEZ concept has been credited with turning around economies in the world, especially in Asia, and specifically in China.

Such designated zones attract foreign capital, bring in new technologies and increase production, leading to a quick industrialisation of the economy.

Finance and Economic Development Minister Patrick Chinamasa said the Government wanted to establish such zones in different parts of the country.

Bulawayo was targeted for leather and textiles, Lupane for petro-chemicals, the swathe of territory or corridor stretching from Victoria Falls-Gwayi–Binga–Kariba for tourism and Harare and Mutare for diamond cutting.—@Princenkosy102

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