In August, rational beings celebrated Zimbabwe’s about turn on a corporate indigenisation programme that destroys any chance of foreign investment. Within days, the Minister who’d delivered the statement, Christopher Mushohwe, was replaced by President-for-Life Robert Mugabe’s nephew. Yes, a family favourite of the same 91-year-old Mugabe who was the only person in the room unaware at the Opening of Parliament, that he was reading same speech he’d given a few weeks earlier – and was applauded anyway by his ZANU-PF compatriots. Now Mugabe’s newly installed nephew has not only re-instated the 51% local ownership rules, but has added a 10% tax levy on foreign companies that haven’t complied. Whenever South Africans are bemused at blunders in economic policy, they need only look north to realise there is always someone worse off. Zimbabweans deserve so much better. – Alec Hogg
HARARE, Oct 5 (Reuters) – Zimbabwe plans to impose a 10 percent tax on foreign-owned firms to fund a black economic empowerment programme that is designed to bring the companies under local majority control, a minister was quoted as saying on Monday.
Some of the companies that could be affected by the new tax include the world’s top two platinum producers Anglo American Platinum and Impala Platinum Holdings, which both have operations in the southern African nation.
Under Zimbabwe’s Indigenisation and Economic Empowerment Act passed in 2008, the minister of youth and empowerment can, with the approval of the finance minister, levy a tax on any company to raise money to fund the black economic empowerment programme.
Youth and Empowerment Minister Patrick Zhuwao told the government’s Herald newspaper that he would propose a 10 percent levy on all foreign-owned firms that have not complied with the law, known locally as indigenisation.
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The money raised would fund mostly rural community trusts to invest in businesses, said Zhuwao, adding that the government expected to raise $93 million annually.
“For us to be able to fund empowerment programmes in the long term, we are proposing the introduction of an empowerment levy and we are empowered by law to propose the levy,” Zhuwawo was quoted as saying by the newspaper.
Zhuwao, a nephew to President Robert Mugabe who was appointed to his job on Sept. 11, could not be reached to comment further.
Efforts to introduce the levy in 2012 failed after then finance minister Tendai Biti, from the opposition Movement for Democratic Change party, refused to sanction its implementation.
Read also: Tendai Biti: Mugabe regime won’t manage economic turmoil beyond next 4 months
Zhuwawo’s comments come more than a month after the previous empowerment minister said the government was relaxing the law in a bid to attract foreign investment.
Zimbabwe’s economy is expected to grow by 1.5 percent this year, half the government’s initial forecast, after weak global commodity prices hit exports and a drought halved the staple maize crop harvest.
