Harare, (New Ziana) – Exporters are set to retain more of their foreign currency earnings and new businesses will get tax breaks under a new scheme aimed at stimulating production and investments across the economy, Finance and Economic Development Minister, Mthuli Ncube has said.
Under the new incremental export incentive initiative, ordinary exporters and gold producers will retain 80 percent of their foreign currency export receipts,up from 60 percent on condition their earnings are higher than the previous month.
Exporters operating in Special Economic Zones and those listed on the Victoria Falls Stock Exchange retain 100 percent of their earnings from 60 percent if they meet the same condition.
Those whose export earnings remain unchanged continue to retain 60 percent.
Prof Ncube said the scheme sought to “create an environment conducive to diversifying production and exports away from the export of unprocessed products.”
It also encourages the listing and participation of more firms on the VFSE and the Victoria Falls Offshore Financial Centre, the minister said.
The scheme is an answer to grumblings by exporters who felt the 60 percent foreign currency retention was too low as they required more to reinvest in their businesses.
Prof Ncube said inclusion of the gold sector was meant to “encourage production and deliveries to Fidelity Printers and Refiners” and applied only to miners who delivered more than their monthly average.
“Government is also putting in place measures to rejuvenate the gold sector through putting in place a Statutory Instrument that recognises artisanal gold miners and ensures that they enhance gold production,” the minister said.
Prof Ncube said new fiscal incentives aimed at promoting investment in the export sector included tax holidays, duty free importation schemes, low corporate tax for companies which export at least 51 percent of their production, among others.
“Newly established enterprises that fall within any priority investment category are granted tax holidays with respect to its corporate or turnover tax and depreciation allowance,” he said.
Zimbabwe has in the past few years turned the leaf, earning more from exports than it was spending as government encourages productive use of foreign currency.
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