HARARE, March 19 (Xinhua) -- The Zimbabwe government has officially amended the Indigenization and Economic Empowerment Act to limit its application to designated diamond and platinum extraction businesses.
The amendments, contained in the Finance Act, which was published in a March 14 Government Gazette Extraordinary, also extend ownership of businesses in the 12 reserved sectors to "citizens of Zimbabwe" as opposed to "indigenous citizens."
Non-citizens who commenced business before Jan. 1, 2018, are allowed to continue, subject to registering with both the Zimbabwe Revenue Authority and the newly created Indigenous and Economic Empowerment Unit and Fund.
The new fund will be housed within the designated ministry and staffed entirely by members of the civil service. It replaces the former National Indigenization and Economic Empowerment Board, which functioned as an autonomous body outside the civil service framework.
In addition, the continued operation of businesses by non-citizens in designated areas will be subject to them opening and maintaining bank accounts in accordance with the law.
Veritas Zimbabwe, an organization that provides information on the work of the Parliament of Zimbabwe and laws of the country, applauded the amendments.
"The amendments make sweeping changes and constitute a huge step in the 'Zimbabwe is Open for Business' program," Veritas said.
The organization noted that any person is now free to invest in, form, operate and acquire ownership or control of any other business outside the reserved ones.
The 12 reserved sectors are: transportation (passenger buses, taxis and car hire services); retail and wholesale trade; barber shops, hairdressing and beauty salons; employment agencies; estate agencies; valet services; grain milling; bakeries; tobacco grading and packaging; advertising agencies; provision of local arts and crafts and their marketing and distribution; and artisanal mining.
Veritas said a new section of the amended act is designed to ensure that in the course of time at least 51 percent of any designated extractive business is owned through an appropriate designated entity.
The three designated entities are the Zimbabwe Mining Development Corporation, the Zimbabwe Consolidated Diamond Company and the National Indigenization and Empowerment Unit and Fund.
Ownership can be with or without the participation of a community share-ownership scheme or employee share-ownership scheme or trust.
"Compliance does not have to be immediate. The minister responsible for the act is empowered to give written permission to a business to comply with the act over a period specified by the minister," Veritas explained.
Non-citizens wishing to open businesses in a reserved sector after Jan. 1 must get permission from the responsible minister, which will only be granted in certain circumstances.
The amendments also provide for the continuation of certain tax incentives enjoyed before March 14, 2018, and give an opportunity for businesses to revise indigenization implementation plans already approved under the 2010 law on indigenization.
Veritas said it is not clear to what extent the Indigenization and Economic Empowerment (General) Regulations of 2010 remained in force.
"The same goes for the plethora of general notices made under the Act. The responsible minister should clarify this by amending or repealing the regulations and notices as soon as possible," Veritas said.
It is also not clear which minister will be responsible for the act since no current minister has the word "indigenization" in his or her title.
Veritas urged President Emmerson Mnangagwa to clarify the position as soon as possible by assigning the act to one of his ministers.