Audrey Galawu
The Zimbabwe Investment and Development Agency has applauded the drafting of some new laws and amendment of existing regulations for the Special Economic Zones and General Investments.
According to ZIDA, the drafting and amendment of legislation which include the ban on unprocessed lithium, reduction of intermediate money transfer tax, suspension of duty for ammonium nitrate and payment for electricity in foreign currency by exporters will encourage Foreign Direct Investment and Domestic Direct Investment.
The Minister of Finance and Economic Development gazetted an Amendment to the Finance Rate of Intermediated Money Transfer Tax Regulations which aim to reduce the rate of IMTT charged on individual transactions.
The rate was reduced from 2% to 1%, a decision which the Agency considers as a step towards the right direction.
ZIDA said lowering the IMT tax will positively impact ease of doing business in Zimbabwe and the Agency can only hope for the tax to be reduced to 0.
“The Minister of Mines and Mining Development gazetted S.I. 57 of 2023, The Base Minerals Export Control (Unbeneficiated Base Minerals Ores (Amendment) Order, 2023 (No.1).
“In terms of section 3 of S.I. 57, export permits for unbeneficiated lithium, can only be granted where the lithium has been dealt with in accordance with the conditions as prescribed in the Schedule.
“In addition, the permit can only be issued where the selling price for the exports is not less than the price as set by the Minerals Marketing Corporation.
“The amendment also provides that an export permit for lithium will not be granted to an exporter unless they prove that they operate an Approved Processing Plant or have obtained a permit to operate an APP that will be completed and fully operational within two years of the export permit.
“This is to further encourage the local processing of minerals to increase value before they are exported," the agency said.
The Agency also applauded the suspension of duty for ammonium nitrate which would help in the price drop of products such as fertilisers and safety explosions.
“The duty would be suspended for specified amounts of ammonium nitrate.
“The suspension of duty will not suspend value added tax and the companies will still be expected to pay VAT for the imported ammonium nitrate.
“The ring-fenced companies are, Jiangshan Civil Explosives (Private) Limited, Intrachem (Private) Limited, Citbay (Private) Limited, GML (Private) Limited, and Sinoblast (Private) Limited. Jiangshan Civil Explosives Pvt Ltd, Intrachem Pvt Ltd and Citbay Pvt Ltd are holders of the ZIDA investment licence,” ZIDA added.
It is important to note that non-exporters will continue paying their electricity bills in local currency.
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