Harare – In a joint congratulatory note to President Emmerson Mnangagwa and his administration, Surface Wilmar (Pvt) Limited and Olivine Industries (Pvt) Limited said the Government should take bold measures to turnaround the economy for good.
Zimbabwe has seen decades of turmoil, sanctions and poor fiscal management.
They suggested a cocktail of measures which the new administration should undertake saying though the solutions may not be popular, they are required for long term and stability.
The two said allowing large withdrawals without reasons need to be checked as it is depriving the country of the much needed for currency for industry to survive.
“We missed this operational issue, after adopting foreign currency in 2009, which led to siphoning of cash from circulation, while generating a parallel economy.
“No country in the world allows withdrawal of large cash without justifiable reasons, and we need to adopt proper controls on cash withdrawals and remittances. Punitive taxes can be implemented on cash withdrawals, to discourage cash transactions over set limits and cash withdrawals and banking of cash receipts should be monitored by ZIMRA, thereby broadening the tax base,” read the congratulatory note.
They said bank account balances, transfers and other transactions should be part of the taxable income declaration.
“This is not being practices and it is allowing hot money being generated in the industry. Incentives on savings, fixed deposit and other methods, will enable normal citizens to lead a better and legitimate life.
“Mortgage finance should be made affordable and interest should be allowed in computation of taxable income to allow growth in construction sector, generating employment.”
Also, the two companies said income tax rates and minimum taxable should be relooked at for individuals, as they are punitive compared to other developing nations and discourage economic growth by dampening consumer spending and promoting parallel economy.
They said reduction in Income Tax will reduce the burden on exchequer, as the net take home pay of civil servants will increase, without increasing their salary.
They challenged the new administration to retool old industries while there is also a need for new industries to be establish to generate employment.
“Any new investment in plant and machinery should be incentivised by the government by way of interest subsidy and higher rate depreciation for tax purposes. This will enable the manufacturing sector to get competitive in international markets for exports.”
Moreover, they said export packing credit facilities should be given priority, wherein exporters are given working capital for raw materials at a lower rate of interest, enabling the exporters to be priced competitively in the international market.
The companies said the subsidy of such finance should be routed through the banks offering such services to exporters, while the bank and country benefits from routing of foreign exchange through legal channels.
Additionally, the companies said Government should give a fixed amount of subsidy on containerised cargo and or provide per ton subsidy to the exporters making sales on FOB (port) or on CFI basis.
“This will make Zimbabwean products competitive in international markets. This should however be provided to the manufacturing sector, who export after value addition.”
Surface Wilmar (Pvt) Limited and Olive Industries (Pvt) Limited are joint ventures between Wilmar International and its associates, Industrial Development Corporation of Zimbabwe Ltd (IDCZ) and Ministry of Finance and Economic Development (MOFED).
They are involved in crushing of oilseeds, refining and bottling of cooking oil, with a production capacity not only for Zimbabwe but for export to regional markets.
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