DRAWBACK OF DUTY:

LEGISTLATION

1. GEN REGS SEC 99

2. ACT SEC 120
3. INDUSTRIAL DRAWBACKS REGS: SI 278A OF 1991

WHAT IS DRAWBACK OF DUTY

- As the procedure which when imported goods are subsequently exported, provides for a refund
to be made in respect of import duties and taxes charged on the goods or on the materials
contained in them or used up in their production.
- The purpose of drawback is to provide facilities which afford, in the interest of the national
economy, relief from import duties and taxes subject to certain conditions, on specified goods,
or classes of goods which are exported.

WHAT TYPE OF DRAWBACKS ARE PROVIDED FOR BY LAW

1. SAME STATE DRAWBACK

- For goods that imported and subsequently exported from ZW in the same state as they were
imported
2. INDUSTRIAL DRAWBACK
- For goods imported that have been subjected to manufacturing or processing in Zimbabwe

SAME STATE DRAWBACK: GEN REGS SEC 99

Provides for a drawback or remission of the whole of the customs duty and surtax paid or payable on
unused goods, which are exported unused from ZW.

CONDITIONS

1. Goods must be exported unused from ZW in the same state they were in at the time of
importation and should not have been used in ZW.
2. Goods should be exported within 2 years from the date on which duty was paid
3. Goods must be exported from a place where there is a Customs House or a Customs Post.
PROCEDURE FOR CLAIMING DRAWBACK: SAME STATE DRAWBACK

At the time of exportation of the goods, the following documents must be presented to ZIMRA for
processing by the exporter through his Agent:

1. Export bill of entry plus supporting documents:

- Cd1, invoice, freight statement,
2. Import bill of entry plus supporting documents: manifest, invoice, consignment note etc
3. Completed 6 x copies of F44
4. ZIMRA will cross examine the export bill of entry versus the import bill of entry
- If satisfied with the validity of the claim, will process the F44 as a voucher, and return the
original copy to the exporter
- Zimra will also physically examine the goods, and wherever possible, seal the goods, and enter
the seal details on the export documentation.
5. The exporter after handing over the goods to the carrier for export, should request the carrier to
sign and stamp the declaration on the reverse of the F44 to certify export of goods.
6. In the case of goods exported by private transport, Customs officer at the point of exit, must
sign and stamp on the reverse of the F44 to certify export of goods.
7. The original F44 certified thus by the carrier or officer at the point of exit, constitutes acceptable
proof that the goods were exported from ZW.
8. On presentation of the F44 to ZIMRA, the officer will further process the F44, and forwards to
the Commissioner for his consideration.
9. If the Commissioner approves, a refund cheque is sent direct the applicant.

INDUSTRIAL DRAWBACK OF DUTY

LEGAL AUTHORITY:

1. CUSTOMS AND EXCISE ACT SEC 120 (1) (b)

2. INDUSTRIAL DRAWBACK REGS SI 278A OF 1991

EXTENT OF DRAWBACK

Regulations provides industrial drawback of duty on:

1. Imported raw materials incorporated in goods manufactured in ZW.

2. Imported packing and materials used for the packing of locally manufactured goods intended for
export which are exported unused
3. Imported components and parts used for the repair of foreign based aircrafts imported
temporarily into ZW
4. Waste and scrap resulting from the manufacture in ZW of goods incorporating imported
materials
CONDITIONS TO BE FULFILLED

1. Finished product must be exported unused in ZW

2. Goods must be exported within 2 years from the date when duty was paid
3. Goods must be exported from a Customs House or Port
4. Original duty paying entry must be endorsed with Drawback clause: Drawback of duty will be
claimed within 90 days: In the computerized environment, the appropriate CPC should be
selected, but clause should still be endorsed on the bill of entry.
5. Manufacturer must maintain a stock book showing full particulars of :
- Raw materials imported
- Raw materials used
- waste material

6. ZIMRA approves the formula or quantities used in the manufacturer of a unit including wastage
and scrap

In the clothing industry, ZIMRA use the formula:

Length of cloth per garment x width=square metre/garment

VDP per square metre x duty rate= DOD per garment

TOTAL DOD= DOD/garment x no of garments

Eg

2M x 100cm= 2 square metres per garment

$3.00 x 20%= 60c per garment

60c x 2=$1.20 DOD/garment

PROCEDURE FOR CLAIMING DRAWBACK

ALTERNATIVE PROCEDURE

EXPORTER SUMITS THE FOLLOWING:

1. Export bill of entry plus supporting documents

2. Bill of entry must be endorsed drawback of duty will be claimed within 90 days
3. After export, within 90 days, exporter must submit the following to ZIMRA:
- 6.X F44
- Bill of entry export plus supporting documents
- Bill of entry import plus supporting documents
- ZIMRA will check validity of claim, and if satisfied , will forward to Commissioner, who will pay
the applicant directly.
- Alternative method allows exporter to claim more than one claim on one drawback claim.
TABLE “A”

REGULATIONS PROCEDURE Laid down in General Regulations and Industrial Drawbacks Regulations.

BEFORE EXPORT

Exporter submits:

i) F44 (x5) at least (6 if an agent needs a copy)

ii) B/E Export
iii) B/E Import
iv) Supporting Documents (to B/E Export and Import e.g. invoices, consignment notes, CD1,
permits and Licences)

Officer:

i) Checks information entered

ii) Numbers F44 on a yearly sequence – (Application Number)
iii) Examines and seals goods
iv) Returns original F44 to Exporter

AFTER EXPORT

Exporter submits original F44 now with declaration of receipt by carrier.

Officer:

i) Mates original F44 with the other copies

ii) F44 numbered and processed as a voucher
iii) Sends documents to Regional Head Office for payment
iv) Files 4th copy

REGIONAL OFFICE

Sends a cheque directly to claimant or deposits refund into claimant account (if application is in
order)

Only one consignment per claim is allowed.

TABLE “B”

ALTERNATIVE PROCEDURE Authorised by the Commissioner BEFORE EXPORT

Export Documents

processed in the normal way.

N.B. B/E Export endorsed ―Drawback of Duty will be claimed within 90 days‖.

AFTER EXPORT (within 90 Days)

Exporter submits:-

i) F44 (x5) (at least 6 if agent needs copy)

ii) Consignment note stamped by Customs and Carrier as proof of export
iii) B/E Import
iv) B/E Export ii) Supporting documents to

Officer:-

i) Checks information entered

ii) Numbers and processes F44 as a voucher
iii) Forwards documents to Head Office for payment
iv) Any number of consignments are allowed in each claim

TABLE “C”

EXPORT DRAWBACK – ACCEPTABLE PROOF OF EXPORT

MODE OF TRANSPORT:

AIR

ALTERNATIVE PROCEDURE REGULATIONS

Shipper‘s instructions or out going Airway Bill ZIMRA stamped and receipted by Airline Official

REGULATIONS PROCEDURE

Original F44 stamped and signed and stamped on reverse declaration by Airline Official

ROAD

ALTERNATIVE PROCEDURE REGULATIONS

F21 Export stamped and signed by ZIMRA at point of exit (border post)
REGULATIONS PROCEDURE

Original F44 stamped and signed on reverse declaration by ZIMRA officer at point of exit

RAIL

ALTERNATIVE PROCEDURE REGULATIONS

Consignment note ZIMRA stamped and receipted by NRZ

REGULATIONS PROCEDURE

Original F44 stamped and signed on reverse declaration by a railways official

POST

ALTERNATIVE PROCEDURE REGULATIONS

F38 stamped and signed by ZIMRA and receipted by a postal official

REGULATIONS PROCEDURE

Original F44 stamped and signed on reverse declaration by a postal official

 INWARD PROCESSING

LEGISTLATION; INWARD PROCESSING REBATE REGULATIONS; S.I. 59 OF 1997

BENEFITS

- Provides rebate of duty on

 imported goods
 taken out of bond for inward processing

Processing means the manufacture of goods.

REGISTRATION PROCEDURES

Any one interested to access this facility must apply to the proper officer on form no I.P.R 1.

Form is obtained from ZIMRA and comprises of 3 parts:

- first part: declaration by the applicant

- second part: completion by ZIMRA official responsible for processing application
- final part: is a schedule of specific information as follows:
 company and its directors
 location of factory
 manufacturing process
 nature and value of finished goods

ZIMRA will physically inspect premises, and confirm that place is secure with provision for locks for both
Customs and applicant to be fixed.

Approved application is forwarded to the Commissioner for final approval.

Applicant is asked to enter into bond on form no 131 with enough surety.

Form 131 is supported by bank or insurance guarantee.

Surety should cover 30% of the duty due when the store is full.

Pay license fees renewable after 31st of December every year.

CLEARANCE OF GOODS UNDER IPR

FROM THE BORDER

1. Goods are moved in bond under CPC 8000 000

2. Goods then warehoused into the IPR BOND under CPC 5280 000

PROCESS
 1. F21 with supporting documents like invoices, permits, packing lists,
2. A declaration to the effect that the goods would be used be used sorely as per IPR regulations
3. In a manual environment, 3 x F21 submitted, with 3 rd copy endorsed rebates section
4. Regulations stipulate that goods to be entered under rebate of duty shall be entered at the port
nearest to the premises of the registered person.

OBLIGATIONS OF IPR HOLDER

1. Keep register reflecting all;

 Imported goods
 Goods taken out of bond
 Disposal details
 All compensating goods and how they have been disposed of
 All copies of import and export bill of entries to be kept in support of such goods
 Submit returns to ZIMRA

HOW SHOULD GOODS IN AN IPR STORE STORED

1. Separate storage of imported raw materials and finished/compensating products.

2. No other goods except those entered under the inward processing facility maybe stored in such
a store
3. Goods of different bill of entries to be stacked separately
4. Commissioner requires rejects to be stored with compensating products and be labeled clearly.

ZIMRA INSPECTIONS

The Regulations gives ZIMRA the right to inspect premises without notice.

The registrant to pay for the extra attendance fees for the ZIMRA officer.

If deficiencies are noticed, the registrant shall pay the duty, and if there are excess goods, the excess
must be debited to stock.

REMOVAL OF GOODS FROM IPR BOND STORE

1. Obligation for duty will only be dispensed off from the registrant, after the manufactured
goods are exported out of the IPR Bonded store.
2. Wastage which is legitimate, the proper will authorize destruction of such goods, and have the
Commissioner write off the duty
3. Goods found not to have been properly used for IPR manufacturing, are duty paid
4. Goods accidentally destroyed or lost, Commissioner has authority to remit the duty due on
such goods
TRANSFER OF GOODS: IPR REGULATIONS ALLOWS

A. FROM ONE REGISTRANT TO ANOTHER: IPR3

 Where a registrant may desire to sell some rebated stock to another registrant
 Such transfer is permissible done on IPR3 approved by Commissioner, stating the conditions
for transfer
 Where the goods are transferred to a sub-contractor for further processing, an application
done on IPR4, approved by the Commissioner, the liability of duty will remain with the
registrant, until the goods are accounted for to the satisfaction of the Commissioner.

CONTROLS ON FINISHED GOODS/COMPENSATING GOODS IN AN IPR BOND STORE

- Compensating products should be exported within 12 months of the date of the grant of the
rebate letter or within such longer time as may be allowed by the Commissioner.

COMMISSIONER MAY CANCEL LICENSE FOR THE FOLLOWING REASONS

1. Person ceases to import goods for inward processing

2. Person fails to comply with regulations
3. Fails to licensing fees
4. Registrant request cancellation
5. After cancellation, any goods not exported as compensating goods, are duty paid.
6. NB VAT IS EXEMPTED AS PER VAT REGULATIONS
EXPORT PROCESSING ZONES

PURPOSE

- Introduced to attract investment in Zimbabwe

- These are places which are in Zimbabwe, but officially and administratively regarded like they
are places outside Zimbabwe, where imported goods don’t pay duty, vat, workers enjoy tax
reliefs.
- Investors operate as if they are in their own countries, being offered tax reliefs, repatriation of
profits

LEGISTLATION

EXPORT PROCESSING ZONE ACT: CHAPTER 14.07: REPLACED BY ZIMBABWE INVESTMENT AUTHORITY
ACT: CHAPTER: 14: 30

EXPORT PROCESSING ZONE GENERAL REGULATIONS: SI 160 OF 1997

CUSTOMS AND EXCISE: CHAPTER 23.02: SEC 62 TO 67

CUSTOMS AND GENERAL REGULATIONS: SI 154 OF 2001: SEC 54 TO 57

BENEFITS

1. Increase of export of manufactured goods bringing forex to Zimbabwe

2. Creating employment to local population
3. Transfer of skills and technology to Zimbabweans

TYPES OF EPZ

1. Industrial Estate type providing:

 Factory space
 Communications-wfi-telephones
 Water/sewerage reticulation

EXAMPLES

4X IN HARARE
1X IN RUWA
1X MUTARE
1X BB
2. STAND ALONE EPZ: RESOURSE BASED EPZ: MOSTLY TIMBER MILLING AND PROCESSING OF
MINERALS
 85 X COUNTRY WIDE
CUSTOMS ACT SEC 63:

Goods imported into EPZ exempt from duty.

CUSTOMS ACT SEC 63 FACILITIES TO BE PROVIDED BY ZIMBABWE INVESTMENT AUTHORITY

1. High enclosure with suitable gate and adequate lighting

2. Suitable free accommodation to the satisfaction of the Commissioner for Customs officers
3. Free of charge maintenance of officers accommodation
4. Suitable space for examination of imported goods by officers

CUSTOMS ACT SEC 65: GOODS DEEMED TO BE EXPORTED AND IMPORTED

1. Goods taken from the Customs territory(within Zimbabwe) and brought to EPZ, shall be deemed
to be exported from Zimbabwe
2. Goods taken from the EPZ to the customs territory( within Zimbabwe), shall be deemed to be
imported into Zimbabwe.
3. Goods brought from outside Zimbabwe into EPZ, shall be deemed not to have entered
Zimbabwe
4. Goods which are manufactured in a EPZ, shall be deemed to have been manufactured outside
Zimbabwe.

CUSTOMS ACT 66: GOODS MANUFACTURED IN EPZ: SHALL NOT BE TAKEN OUT OF EPZ EXCEPT

1. For export
2. For repair, maintenance in the customs territory after Commissioner ‘s approval.

CUSTOMS ACT SEC 67: EPZ GOODS MAY BE TRANSFERRED TO ANOTHER EPZ OR BONDED WAREHOUSE
OR DESTROYED AFTER APPROVAL FROM THE COMMISSIONER

WHO CAN BENEFIT

 All manufacturers
 Processing assembly
 Service industry

CONDITIONS: Investors must

 Invest new capital

 Generate new jobs
 Export at least 80% of output
 Transfer technology to locals

PURPOSE OF EPZ ATHORITY

 1. Granting of permits to private importers
2. Granting of licenses to operate in EPZ areas
3. Facilitating of setting up of ZIMRA offices in EPZ
4. Monitor and evaluate compliance

BENEFITS OFFERED BY EPZ

1. Duty free importation of capital equipment

2. Duty free importation of raw materials
3. 5 year free corporate tax
4. Tax free fringe benefits for employees
5. 100% foreign ownership
6. 100% repatriation of profits
7. Exemption from capital tax

REGISTRATION OF EPZ

A: Application for Investment license done on EPZ1 and accompanied by:

- License fee
- Certified Copy of memorandum of association
- Certified Copy of articles of association
- Certified copy of certificate of incorporation

If application approved, license will be issued in form EPZ3 by the Commissioner of Customs and Excise.

Licensee to enter into bond with Customs F131 with enough surety.

B: Application for developer’s permit, done EPZ2, and if approved license issued on EPZ4.

OBLIGATIONS OF EPZ BOND HOLDERS

1. Maintenance of records-incoming stock and outgoing stock and their respective bill of entries.
2. Record of waste material to be maintained.
3. Record of losses, spillage, leakage to maintained.
4. Submit returns to Zimra

CLEARANCE OF GOODS

CAPITAL EQUIPMENT

GEN REGS SEC 142: REBATE OF DUTY FOR EPZ CAPITAL EQUIPMENT; SHALL PRODUCE TO THE
COMMISSIONER THE FOLLOWING

1. Valid Investment license

2. Evidence that EPZ is not in a Industrial Park
3. Particulars of the goods imported
 4. Clearance is done on F21: CPC: 4000:438 OR 4000:439( CAPITAL EQUIPMENT)

How to make special economic zones work

Posted on September 15, 2017 by The Independent in Analysis, Comment, Opinion

The Special Economic Zones (SEZs) Act was promulgated into law in October 2016, largely to
attract foreign direct investment (FDI) inflows, generate employment and promote exports.

By Prosper chitambara

To date, government has designated a number of sites as special economic zones. The
introduction of SEZs in Zimbabwe is not a novel concept as government once came up with
Export Processing Zones (EPZs) from 1996-2006 that were mainly export-oriented.
The EPZs initiative produced mixed results. An estimated 205 companies were established,
creating 32,512 jobs and generating about US$172 million in terms of cumulative investment
and US$1,15 billion in terms of export earnings.

There were, however, concerns over labour, social, gender-specific and environmental issues. In
particular, there were concerns over the failure to deliver quality employment and a living wage,
as well as the high opportunity costs involved.

Interestingly, a number of scholars have advocated for economy-wide liberalisation as opposed

to implementing SEZs, which they view as a second-best policy.

Other scholars and activists have also criticised SEZs on the grounds of them being
discriminatory against domestic investors.

Generally, a SEZ can be defined as a geographical site with preferential laws, policies and
regulations that are more liberal than those existing in the rest of the economy.

SEZs operate through different forms such as Free Trade Zones (FTZs), Export Processing
Zones (EPZs), Free Zones (FZs), Industrial Estates (IEs) and Urban Enterprise Zones (UEZs)
among others.

The main motivation for designating SEZs is to attract greater FDI inflows, create jobs and
increase exports from the host country. SEZs were first introduced successfully in the People’s
Republic of China under Deng Xiaoping in the early 1990s as part and parcel of its “open the
door, change the system” policy.

A number of countries were inspired by the Chinese and followed suit, including many African
countries such as Ethiopia, Madagascar, Lesotho, Nigeria, Senegal, Ghana and Mauritius. In
many of these African countries, however, SEZs have resulted in the creation of “enclaves” with
weak linkages with the rest of the national, regional and global economies, thereby limiting their
macro-economic and developmental impacts.

The failure of SEZs in other countries should, however, not deter us, but rather provide useful
lessons, while the success of SEZs in other countries should inspire us.

For SEZs to be a success in Zimbabwe, there are a number of key success factors that will need
to be addressed. First and foremost, the success of SEZs is a function of how competitive and
strong the domestic economy is.

International evidence has shown that SEZs are hindered by the same problems affecting the rest
of the economy, such as inadequate infrastructure and institutional weaknesses, among others.

In other words, the success of SEZs does not just depend on the incentives offered in the Zone,
but more importantly on the economy-wide conditions prevailing in the country. In particular,
the policy and institutional environment is very important.

The more business-friendly and competitive the surrounding environment, the greater the
potential SEZs have to stimulate economic activity both within and outside the Zone. Currently,
the investment climate in the country remains highly problematic with both foreign and domestic
investment remaining largely subdued. This represents a big threat to the success of SEZs.

The country scores badly on the ease of doing business and competitiveness indicators.
According to the 2017 World Bank Doing Business Report, the country moved four places down
in the ease of doing business rankings from 157 out of 190 countries in 2016 to 161 in 2017.

The country is also ranked 183 out of 190 countries in terms of starting a business, one place
down from 182 in 2016. On average it takes 91 days to start a business and the process requires
10 procedures. The key determinants of the investment and business climate include
infrastructure (hard, soft and social), business regulations and policies and trade facilitation.

SEZs are more successful in national economies with adequate infrastructure, in particular,
transport and energy infrastructure.

In China, starting from 1978, the Chinese government invested heavily in both physical and
social infrastructure. They have also developed strong institutions.

This has helped to ensure the success SEZs. Infrastructure development in the country remains
largely inadequate. According to the 2016-17 Global Competitiveness Report, inadequate supply
of infrastructure is the fifth most problematic factor for doing business, with the country ranked
123 out of 138 countries with a score of 2,5 (out of a possible seven) in terms of infrastructure.

In the 2016, the Ibrahim Index of African Governance, Zimbabwe is ranked 34 out of 54
countries for 2015 in the infrastructure sub category with a score of 34,1 out of 100, down from
41,6 out of 100 in 2014.
Notwithstanding, government has embarked on a number of key infrastructure projects such as
the dualisation project of the Beitbridge-Harare highway.

Such projects will need to be scaled up. Supportive social infrastructure such as housing,
education, and health services is also key for the success of SEZs.

Innovative means of domestic resource mobilisation will need to be explored and fully harnessed
in order to sustainably finance key infrastructure projects in order to unlock the full potentials of
SEZs.

Empirical and experiential evidence has also highlighted the need for a deliberate emphasis on
creating and strengthening linkages, value chains and systems between the local Small, Medium
and Micro-sized Enterprises and multi-national corporations operating in the SEZs.

This will help to ensure that the spillovers from SEZs are pro-poor, inclusive and broad-based.
This will also help to mitigate and countervail the risk of the creation of ‘enclave’ economies.
SEZs are most successful when they are targeted toward labour intensive and export oriented
manufacturing sectors.

The country will also need to focus on economic activities that exploit its comparative and
competitive advantages such as agriculture, mining and tourism.

SEZs must also be an integral part of the country’s industrial, trade and investment policies.
There must be policy complementary, synergy and consistency among all the country’s policies.

This has sadly been one of the country’s missing links. In addition, strong inter-departmental
coordination within government and strategic public-private partnerships are also key. The
enforcement of environmental and labour standards has been found to be very important for the
success and sustainability of SEZs. In almost all the successful countries, wages for labour were
higher, with working conditions more favourable inside the zones than outside.

In the less successful countries there were negative environmental and social impacts,
particularly with respect to the exploitation of workers through failure to uphold international
norms for labour standards.

There is need for high-level political support and broad commitment to ensure the successful
implementation of SEZs in Zimbabwe. The Zimbabwe Special Economic Zones Authority must
be well-resourced and capacitated to carry out its mandate.
Chitambara is a development macroeconomist based in Harare. The views expressed in this
paper solely belong to the author.

The aim is to provide independent professional advice as well as objective in-depth analysis of
monetary and other economic policies in Zimbabwe. These New Perspectives articles are co-
ordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society (ZES) cell
+263 772 382 852 and email kadenge.zes@gmail.com.
Special Economic Zones
GN 2019-1838 SPECIAL ECONOMIC
ZONES ACT [CHAPTER 14.34]
IT is hereby notified that, in terms of section 20(1) of the Special Economic Zones Act [Chapter 14:34], the
Zimbabwe Special Economic Zones Authority, has declared a portion of Selous measuring 50 667 hectares as
a special economic zone. The zone is located on certain piece of land covered by special mining grants issued
to Karo Zimbabwe Holdings (Private) Limited as will morefully appear within the coordinates specified in the
Schedule below.
 

 Read more about GN 2019-1838 SPECIAL ECONOMIC ZONES ACT [CHAPTER

14.34]

GN 2019/1519 - Amendment of a Special

Economic Zone
IT is hereby notified, in terms of section 20(2) of the Special Economic Zones Act [Chapter 14:34], that the
Zimbabwe Special Economic Zones Authority has amended and extended the Belmont, Donnington and
Kelvin Special Economic Zone to include Westondale industrial area. The area covered by the extended
Westondale zone is located within the coordinates set out in the Schedule

 Read more about GN 2019/1519 - Amendment of a Special Economic Zone

Zimbabwe Investment and Development

Agency Bill -- HB 2, 2019
The object of this Bill is to provide for the promotion, entry, protection and facilitation of investment; to provide for the
establishment of the Zimbabwe Investment and  Development  Agency;  to  provide  for  the One Stop Investment 
Services Centre; to repeal the Zimbabwe Investment Authority Act [Chapter 14:30], the Special Economic Zones Act
[Chapter 14:34] and the Joint Ventures Act [Chapter 22:22]; and to provide for matters incidental to or connected to
the foregoing.

 Read more about Zimbabwe Investment and Development Agency Bill -- HB 2, 2019
GN 2019-104 SPECIAL ECONOMIC
ZONES ACT [CHAPTER 1434] Amendment
of a Special Economic Zone
IT is hereby notified that, in terms of section 20(2) of the Special Economic Zones Act [Chapter
14:34], the Zimbabwe Special Economic Zones Authority, has amended the Surewin
(Private) Limited Special Economic Zone declared under General Notice 660 of 2018, as item 1,
gazetted on the 31st of August, 2018.

 Read more about GN 2019-104 SPECIAL ECONOMIC ZONES ACT [CHAPTER 1434]
Amendment of a Special Economic Zone

GN 2018-675 - Declaration of Special

Economic Zones in Bulawayo Metropolitan
Area
General Notice 675 of 2018.

SPECIAL ECONOMIC ZONES ACf [CHAPTER 14:34]

Declaration of a Special Economic Zone

IT is hereby notified that, in terms of section 20 of the Special Econonic Zones Act [Chapter
14:34j, the Zimbabwe Special
Economic Zones Authority, has declared the area specified below to be a Special Economic
Zone with effect from 24th August, 2018.

 Read more about GN 2018-675 - Declaration of Special Economic Zones in Bulawayo

Metropolitan Area

Special Economic Zones Bill - H.B. 15, 2015

Special Economic Zones - H.B. 15, 2015
Explanatory Memorandum

This Bill seeks to provide for the establishment of the Special Economic Zones Authority and to
provide for the functions thereof; to provide for the constitution and functions of the Special
Economic Zones Board; to provide for the establishment of Special Economic Zones, the
administration, control, regulatory measures and incentives.

The individual clauses of the Bill are explained below:

 Read more about Special Economic Zones Bill - H.B. 15, 2015

Special Economic Zones - Statement from

Zim Gov website
DISTRIBUTED BY veritas

e-mail: veritas@mango.zw   www.veritaszim.net

Veritas makes every effort to ensure the provision of reliable information,

but cannot take legal responsibility for information supplied

 Read more about Special Economic Zones - Statement from Zim Gov website

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Understanding: Special Economic Zones in

Zimbabwe

By Emmanuel ChilamphumaNovember 21, 2018

Leave a Comment on Understanding: Special Economic Zones in Zimbabwe
Special Economic Zones is a concept still in its infancy yet progressive in Zimbabwe. In general,
Special Economic Zones exist to attract investments in particular regions of a country. In which,
those investing in SEZs benefit from several fiscal and non-fiscal incentives established by the
government of that particular country. In the passages to follow, I intend to outline the incentives
for operating in Zimbabwe’s SEZs as well as, explaining the finer details of regulation and
bodies which govern these zones.     

To begin with, the Special Zones Act was enacted in November 2016 as part of the government’s
efforts to engage foreign investors and, reversing the country’s economic decline. Through this
Act, the Zimbabwe Special Economic Zones Authority was established to oversee and assist
companies/investors keen to conduct business in these areas. The main functions of the Authority
include administering and controlling SEZs, granting investment licences, and monitoring
activities of approved investments.

At this point, some may wonder how Special Economic Zones differ from operating in well-
known industrial sites or business complexes. The answer is that domestic trade and business law
does not apply to Special Economic Zones whereas, companies operating outside these zones
must comply with the laws. Also, as mentioned earlier, investors conducting business these areas
receive incentives from the government. Currently, investors operating or considering in Special
Economic Zones receive the following:
 

Companies operating outside Special Economic Zones are subject to 25% corporate tax whereas,
companies within the Zones pay nothing for the first 5 years and 15% thereafter. The tax rate
remains the same for as long as a company continue to operate within the Zones or unless
government policy changes.  For companies outside Special Economic Zones, the rates for
Withholding Tax on dividends and fees normally depend on whether the parent company or
investor is based in a country which has signed Double Taxation Agreements with Zimbabwe. In
principal, tax treaties exist between countries to reduce the amount of tax paid by companies or
investors. Generally, withholding tax rates are significantly high for investors in countries that
Zimbabwe has not signed an agreement with. However, companies or investors in Special
Economic Zones are not obliged to pay any tax on dividends distributed to foreign shareholders
nor on services provided by the parent company.

Also, another major factor is that companies outside SEZs face an import duty fee on all capital
equipment used in daily operations of the business. In contrast, companies in SEZs can import
equipment duty free but must prove that the equipment will be utilized in SEZs.  

The Zimbabwe government gazetted the Statutory Instrument (SI) 154 of 2018 in August 2018
effectively bringing Special Economic Zones into full operation. Companies such as Iron Steel
Company of Zimbabwe, Bernard Development Corporation and AfrochinePvt Ltd have been
granted SEZ status, to mention a few. In Zimbabwe’s case, the concept of Special Economic
Zones is to re-engage with the international business community, job creation and increase
exports. The latest SEZ regulation requires companies operating within the zones to sell only
20% of their output on the domestic market and export the rest.

This is mainly because the country’s exports declined massively in recent years and impacted the
inflow of foreign currency.  

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Published by Emmanuel Chilamphuma