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    Government expands list of reserved sectors

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    Harare, (New Ziana) –The Zimbabwe government has added five areas to the list of reserved sectors as part of a cocktail of measures to increase the tax base and encourage use of the local currency, the Zimbabwe Investment Development Agency (ZIDA) has said.

    The existing reserved sectors include transport, retail and wholesale trade, barbershops, hairdressing and beauty salons, employment and advertising agencies, grain milling bakeries, tobacco grading and packaging, provision of local arts, craft marketing and distribution and artisanal miners.

    Added to the list are haulage trucking, borehole drilling, customs clearing, shipping and forwarding, and pharmaceutical retailing, said ZIDA in its annual report released simultaneously with its 2024 fourth quarter report.

    “Section 3A (4) of the Indigenisation and Economic Empowerment Act provides that ‘only a business owned by a person who is a citizen of Zimbabwe may operate in the reserved sector of the economy.

    On promulgation of the Finance Act 2 of 2024, foreign owned businesses will no longer be allowed to operate in the above listed additional reserved sectors. The Agency will no longer be licensing foreign businesses into those sectors,” it said.

    The addition to the reserved sectors was made through the amendment of the Indigenisation and Economic Empowerment Act (Chapter 14:33) as part of the Finance, Economic Development and Investment Promotion Minister’s promulgation of the Finance Act 2 of 2024, in which several amendments were made to the Finance Act.

    These included amendments to the Income Tax Act, Value Added Tax Act, Customs and Excise Act, Indigenisation and Economic Empowerment Act, and the Reserve Bank of Zimbabwe Act.

    The amendments are aimed at increasing the tax base and encouraging the use of the local currency.

    ZIDA noted that other impactful legislation in 2024 were the introduction of the Petroleum (Levy) Regulations whose funds go towards strengthening the regulatory compliance in the petroleum sub-sector, and amendment of the Customs and Excise (General) Regulations among many other areas.

    These empower the ZIMRA Commissioner General to grant a rebate of duty on capital equipment and material imported by approved contractors for the construction of new cities in line with the government’s development agenda.

    The imports, however, exclude motor vehicles, fuel, cement, consumables, and other materials available in Zimbabwe at competitive prices and comparable quality.

    ZIDA said the revision of the Labour Relations (Specification of Minimum Wages) (Amendment) Notice, 2024 (No. 17), Statutory Instrument 186 of 2024 under which the Public Service, Labour, and Social Welfare Minister revised the minimum wage for all employees whose remuneration is not fixed by or in terms of any agreement, determination or regulations made under the Labour Act [Cap. 28:01] to US$150.00 per month was also impactful.

    “The Agency advised all its investment community stakeholders of the amendment to ensure that they are always compliant, as failure to adhere to the changes will result in legal liability on the part of the employer,” it said.

    The other was the amendment of the Environmental Management (Control of Alluvial Mining) Regulations, 2024 (No. 3) Statutory Instrument 188 of 2024 banning alluvial mining activities and the prospecting for alluvial deposits in or along any river or public stream.

    The ban applies even to persons who would have obtained a special grant or express written authority from the Minister of Mines and Mining Development.

    The prohibition was motivated by the understanding that alluvial mining significantly contributes to environmental degradation, siltation, and pollution.

    New Ziana

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