Source: New framework guarantees duty relief for entire project lifespan – herald
Zvamaida Murwira
Senior Reporter
TREASURY has moved to synchronise the lifespan of duty rebates for approved capital projects with the official duration of the projects themselves, aiming to improve the ease of doing business and stimulate economic development.
The policy change ends a previous system where rebates, which grant exemption on imported machinery and construction materials, operated on a separate, fixed timeline.
That system risked expiring before a project was complete, potentially disrupting supply chains and inflating costs midway.
The new measures, announced in a recent Government Gazette, were designed to ensure an uninterrupted, duty-free import window for essential capital goods for the entire lifecycle of an approved development.
The shift was designed to provide investors with greater certainty and reduce the overall financial burden of large-scale investments.
Approved developments typically include large-scale commercial, residential and public works schemes.
Specific examples cited include the Dzivarasekwa Extension Phase 2 housing project and critical dam constructions such as Kunzvi, Semwa, Tugwi-Mukosi and Gwayi Shangani.
The synchronised rebates also extend to the energy generation sector, covering new power plants and related infrastructure. By lowering the cost of importing specialised equipment, the Government aims to accelerate the rollout of new electricity capacity.
The extension of rebate was announced by Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube in a Statutory Instrument of a Government Gazette
Prof Ncube made the regulations in terms of section 235 of the Customs and Excise Act [Chapter 23:02].
“The Customs and Excise (General) Regulations, 2001, published in Statutory Instrument 154 of 2001 (hereinafter called “the principal regulations”), are amended in section 140 (“Rebate of duty on goods imported temporarily for an approved project”) by the insertion in subsection (1) of the following proviso:— “Provided that all projects approved to benefit under this section prior to 1st December, 2020, shall continue to benefit from the rebate for the duration of the life of the project,” reads the regulations.
“The principal regulations are amended in section 141 (“Rebate of Duty on Goods for Incorporation in the Construction of Approved Projects”) in subsection (1) by the insertion of the following proviso — “Provided that all projects approved to benefit under this section prior to 1st December, 2020, shall continue to benefit from the rebate for the duration of the life of the project.”
In terms of Section 140 of the Customs and Excise (General) Regulations, a rebate of duty may be granted on goods imported temporarily for a project approved by the responsible minister. This is subject to prescribed conditions, which include that the rebate covers goods temporarily imported by contractors for the completion of such approved projects. The rebate does not apply to goods intended for consumption or incorporation into the completed structure.
The law also stipulates that no person to whom a rebate of duty has been granted shall sell, offer, or display for sale, lease, hire, lend, pledge or in any manner dispose of to any other person any goods in respect of which such rebate has been granted, without the prior written permission of the Commissioner General of the Zimbabwe Revenue Authority.
Projects that qualify for the concessions are approved by Treasury and a rebate of Duty entails exemption from both customs duty and Value Added Tax payable on the importation of goods.
These projects are granted duty exemptions on imported capital goods, such as machinery and construction materials that form a permanent part of the project.
