MDC-T: Zhuwao's 10pct levy criminal, economy killer

By: 
Staff Reporter

THE opposition MDC-T party has hit out at threats by a cabinet minister to impose a 10 percent levy on foreign companies, describing the tax as “blatantly criminal”, adding it would “most certainly cripple the few companies that are still operating in Zimbabwe”.

Youth and empowerment minister, Patrick Zhuwao, last month proposed a 10 percent indigenisation levy on all foreign companies which would increase to 12.5 percent by 2017.

The proposal was widely criticised even from within Zanu PF party prompting an angry Zhuwao to threaten to impose the tax, telling critics in Zanu PF that; “for those who want to stand in my way, I know how you are going to come and I have a counter-measure for you”.

But in a statement Friday, the MDC said Zhuwao “should be strongly reprimanded for advancing extortionist policies on already over – burdened and struggling companies.”

“The Minister’s draconian proposal is not only retrogressive but it will most certainly cripple the few companies that are still operating in Zimbabwe,” the party added.

Zhuwao said the tax would be used to fund youth empowerment projects as force companies to comply with indigenisation laws which force foreign firms to cede 51% of their Zimbabwe operations to locals.

The MDC-T said the proposal comes at a time the country’s formal industry has virtually collapsed due to an economic crisis that has lasted more than a decade, leaving unemployment above 85 percent.

“Decades of rampant corruption and misguided economic policies combined with gross mismanagement and thievery by the Zanu PF regime have already reduced capacity utilisation to around 34% in industry according to the … Confederation of Zimbabwe Industries (and) the Zimbabwe National Chamber of Commerce.

“The proposed new levy, coming on top of a myriad of other levies and taxes, will cripple the few existing foreign firms who are going to be forced to pay.”

Party spokesman, Obert Gutu added:  “The MDC finds it extremely absurd that Zhuwao would exhibit such kind of archaic and medieval thinking  that is essentially centred around illegal and unconstitutional  asset – grabbing.

“It is this kind of retrogressive and anachronistic policy making that has reduced Zimbabwe into a basket case and a virtual banana republic in a very short period of 35 years since the country attained independence from British colonial rule.”

The MDC-T also questioned Zhuwao’s claim that funds raised through the levy would be used to empower youths.

“It is beyond reasonable doubt that Zhuwao’s real intention is not to benefit the majority of the people of Zimbabwe but to perpetuate the Zanu PF regime’s culture of patronage that will only benefit a few politically well-connected individuals and some other such regime apologists who will get an opportunity to take control of successful business enterprises at no cost to themselves.

“The move by Zhuwao is blatantly criminal and unconstitutional and thus, it should be strenuously resisted by all right-thinking and patriotic Zimbabweans,” said Gutu.

Zhuwao was appointed to the empowerment portfolio by his uncle President Robert Mugabe to push the controversial indigenisation programme after the last two ministers had appeared to take a more measured approach.

The MDC-T said the new minister was behaving like a “bull in a China shop” in his implementation of a policy blamed for the country’s poor record in attracting foreign direct investment.

“Zhuwao should be advised not to conduct himself like a bull in a china shop. He should sober down and desist from being delusional and excitable,” said Gutu.

“His bullish and thuggish approach to issues to do with economic empowerment can only be a recipe for socio-economic doom and political mayhem.

“It boggles the mind why Zhuwao is so hell bent on decimating what is left of the formal economy in Zimbabwe.

“(His) ill-conceived and ill-thought out proposal for an additional levy will inevitably  escalate capital flight and in the process, exacerbate the suffering of the majority of Zimbabweans who are already living in poverty and destitution.”

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