Cabinet decides against Indigenisation levy; directs ministries to cancel licences for non-compliant firms
CABINET has directed that from April 1, 2016 all line Ministries should proceed to issue orders to licencing authority to cancel licences of non compliant business within their respective sectors of the economy to ensure compliance with the Indigenisation and Economic Empowerment Act.
Government had given foreign owned businesses up to March 31 to submit their indigenisation compliance plans.
Youth, Indigenisation and Economic Empowerment Minister Patrick Zhuwao told journalists this morning that Cabinet had resolved to withdraw the proposed indigenisation levy and would instead cancel all licences of non-compliant companies.
“Cabinet has directed that on April 1, 2016, all line Ministers invoke Section 5 of the Indigenisation and Economic Empowerment Act against all non-compliant businesses in their sectors.”
He said invoking Section 5 of the Act was purely a technical process which shall come into effect by “pure operation of the law.”
Under the process, the line Minister shall issue an order to a licencing authority to cancel licences of non-compliant business and notify the business in writing of the intention to cancel the licence.
The business is allowed to show cause why the licence should not be cancelled. Thereafter the line Minister will direct the non-compliant businesses to become compliant. Failure of which the line Minister will proceed to notify third parties likely to be affected by cancellation of the licences and the Licencing authority shall without notice cancel the licence if a business remains non-compliant after 30 days of having been given the room to comply.
“However management of compliance lies within or at the discretion of the Line Minister. It’s up to the discretion of the Minister to determine what is just cause and what is not of non-compliant business,” Zhuwao said adding that he was confident of the ability of the line Ministers to comply with the Act.
“The line Minister will be required to report to Cabinet on the actions taken and as such there will not be policy inconsistencies. If there has been error of judgment then Cabinet will correct that. There is not a single minister who didn’t approve of it at Cabinet on Tuesday. If they don’t ensure compliance the Ministers will effectively be breaking the oath of Office which they took when they were appointed to office,” he said.
On the levy, Zhuwao said Government had listened to the voice of business who had expressed concern on the proposal.
“We will not have the levy but what we will have is full compliance.”
He said three months into 2016 and businesses had continued to disregard the laws “as if daring President Mugabe and his Government to do something about their contemptuous behaviour.”
“Well, laws are to be adhered to. We must never breed lawlessness as a nation. The failure to adhere to the laws of the land must attract immediate consequences that must be severe and dire enough to ensure that the law is respected and adhered to.”
Cabinet has also directed that all line Ministries must make available to the National Indigenisation and Economic Empowerment Board (NIEEB) a full comprehensive list of all companies that are licenced to operate within their sectors within a week from March 22, 2016 for the purposes of verifying their indigenous status.
Zhuwao said that from April 1, indigenous Zimbabweans will be looking with expectation to see the law that enables them to own their economy begin to be effectively enforced.
He said the operational pieces of legislation for Indigenisation remains the principal Act of 2008, Stat 21 of 2010 (which set the deadline of compliance at March 31, 2015), General Notice 114 and 459 of 2011 and 280 of 2012 and Finance Act (3) of 2014.FinX
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