Maravi

Magande announces broad incentives to woo investors

Magande announces broad incentives to woo investors
By EMELDA MWITWA

GOVERNMENT has provided investment incentives by zero-rating tax on import duty for five years on trucks, equipment and raw materials for companies that would be operating in tax free zones. These incentives, which also cover tax-free profits, would be under the Zambia Development Agency (ZDA) priority sectors and Multi-Facility Economic Zones (MFEZ).

Minister of Finance and National Planning Ng’andu Magande, who announced the growth incentives to Parliament yesterday, said the tax relief would run for five years from the first year profits are made. From the sixth to the eighth year, only 50 per cent of the profits would be taxed, and in the ninth and tenth year, the companies would only pay 75 per cent tax.

Other measures to encourage investment from local and foreign entrepreneurs include the zero per cent tax on dividends for companies in the priority sectors or MFEZ. “Enterprises operating in the MFEZ would also enjoy zero percent import duty on trucks, specialised motor vehicles, raw materials, capital goods and machinery, for a period of five years,” the minister said. They would also enjoy deferment of VAT on machinery and equipment, including trucks and specialised motor vehicles imported for investment in MFEZ or the priority sectors.

Mr Magande said the ZDA would address the high cost of doing business in Zambia, and would simplify the processing of various business formalities such as licensing. MFEZ will diversify the economy and promote exports. Two locations for this project have since been identified in Lusaka and Chambishi, on the Copperbelt.

The Minister said the Japanese International Development Agency (JICA) has since engaged a Malaysian company, Kulim High Technology Park Corporation to develop the Lusaka MFEZ. The Chinese Government would develop the Chambeshi zone. Some 50 enterprises with an estimated investment of US$800 million over the next four years would operate under the zone. Mr Magande stressed that Government would offer incentives to both Zambian and foreign firms in order to promote manufacturing and stimulate export activities, technological development, skills transfer and job creation.

Labels: 2007 BUDGET, FDI, FREE ENTERPRISE ZONES, IMF, World Bank

posted by MrK @ 7:09 PM