Youth Development, Indigenisation and Empowerment Minister Patrick Zhuwao is proposing a 10 percent empowerment levy on companies as part of efforts to generate internal resources to fund the indigenisation programme.
Minister Zhuwao disclosed this in an interview on Friday saying the money would be used to make economic empowerment a reality for the majority of Zimbabweans.
“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 although it can only be implemented with the approval of the Ministry of Finance and Economic Development,” said Minister Zhuwao.
“The legal opinion we have is that the levy should be standard. However, we must be thankful to those companies that have indigenised so we will offer them discounts on that empowerment levy. This, therefore, means that entities that are 100 percent indigenous will get a 100 percent discount while those that are not, will not get any discount and will have to pay the full levy,” Minister Zhuwao said.
He said from their projections, $93 million could be raised annually from the levy. He said the money could be used to fund community share ownership trusts established across the country.
Asked whether the proposed levy would not burden companies already struggling in the current environment, Minister Zhuwao said his mandate was to see Zimbabweans empowered.
“I am a minister of Government appointed by a President elected by the people of Zimbabwe to deliver economic empowerment to them. My job requires that I address the concerns of the people of Zimbabwe. Creating economic empowerment is a major concern for the people of Zimbabwe. I cannot advocate for the interests of foreigners ahead of people who have put me in this job,” he said.
About $38 million has so far been deposited into community share ownership trusts with $14 million having been spent already.
The Youth Development, Indigenisation and Economic Empowerment ministry says it has approved indigenisation plans for 12 000 companies that include small enterprises.
eme was launched by President Mugabe in 2012 and five diamond companies operating in Marange diamond fields pledged a total of $50 million towards the trust.
Anjin, Mbada, Marange Resources, Diamond Mining Company and Jinan reportedly pledged $10 million each then. But they have denied knowledge of the trust together with the pledges they allegedly made.
Meanwhile, Minister Zhuwao says the Zanu-PF Government will not repeal the Indigenisation and Economic Empowerment Act.
Minister Zhuwao said this at the National Defence College on Thursday while presenting a paper on the country’s indigenisation and economic empowerment policies and their impact on national security.
“Apart from the Act itself, indigenisation is enshrined in the Constitution first and foremost, and secondly, this Government was elected on a Zanu-PF manifesto premised on indigenisation and economic empowerment,” he said.
“There are people who believe that the Indigenisation Act will be repealed, but when the President set the legislative agenda of the Third Session of the Eighth Parliament, the Indigenisation and Economic Empowerment Act was not on the agenda.”
Minister Zhuwao said implementation of the law was facing challenges, including false pronouncements by senior Government officials that the Act would be revised.
“We have national leadership that is often compromised at international workshops and seminars where they make pronouncements that the Act will be watered down,” he said. “You cannot water the law down like it is Mazoe (orange drink). It is either repealed or enforced.”
Minister Zhuwao said it was the mandate of the electorate to safeguard their interests by ensuring that leadership pursued policies for which they were voted.
He said it would be a threat to national security if the bulk of the country’s resources were left in the hands of a few people, making the empowerment policies necessary to maintain stability.
Minister Zhuwao said over 1 216 empowerment transactions had been approved since the promulgation of the Act in 2008, while $134,5 million in pledges for Community Share Ownership Trusts had been made, with $38,3 million of the money being released.
The indigenisation policy opened doors for wider involvement of Zimbabweans in the formal economy which had since independence remained dominated by whites. herald