Zim leads in investment policy reforms
By Tichaona Kurewa
HARARE – Zimbabwe is one of the leading countries globally in implementing investment policy reforms to attract foreign direct investment (FDI) as part of its efforts to grow the country’s economy.
According to the United Nations Conference on Trade and Development Investment Policy Monitor (IPM), Zimbabwe is the only country in Southern Africa that introduced one investment policy reform during the period October 2016 to February 2017 to stimulate and expedite investment.
IPM says several countries took noteworthy investment policy measures at national level during the period under review, among them are the issuance of a comprehensive circular to attract foreign investment.
“Twelve countries Benin, China, Colombia, India, Israel, Italy, Kazakhstan, Republic of Korea, Tunisia, Turkey, Uzbekistan and Zimbabwe adopted measures for the promotion and facilitation of investment,” the report says. “On the whole, countries encouraged investment through granting tax incentives or facilitating investment procedures.”
The report says Zimbabwe adopted measures for the promotion and facilitation of investment. “For instance, Zimbabwe introduced various tax incentives for companies within special economic zones. These incentives will only apply to production for export,” reads part of the report.
The report ssays 33 countries took 49 investment policy measures in the review period. The share of liberalisation and promotion measures reached 82 percent – broadly in line with the average of the last five years.
“Most policy measures improved entry conditions, reduced restrictions or facilitated foreign investment, with developing countries and transition economies taking the lead the latter may be negatively affected by policies in other areas, such as protectionist trade policies, or by restrictive administrative decisions of host countries in respect of individual investment projects.”
Zimbabwe’s 2017 national budget statement presented various kinds of tax incentives from 1 January 2017 to investors including, inter alia, exemption from corporate income tax for the first five years of operation, and a rate of 15 percent. Afterwards, special initial allowance on capital equipment to be allowed at the rate of 50 percent of cost from year one, and 25 percent in the subsequent two years; a flat rate of 15 percent tax on specialised expatriate staff and exemption from non-residents tax on royalties and dividends.
Others include duty-free import of capital equipment for Special Economic Zones; and duty-free import of inputs, including raw materials and intermediate products (materials and products not produced locally) for use by companies set up in the Special Economic Zones.