The Zimbabwe Revenue Authority chief Gershem Pasi says Zimbabwe should think twice before granting foreign companies tax incentives because this might benefit the countries of origin of the companies rather than Zimbabwe.
Zimbabwe is offering all sorts of incentives, including the setting up of special economic zones, to attract foreign investment to revive the country’s ailing economy.
According to the national news agency, ZIANA, Pasi said China, now the world’s second largest economy, had successfully implemented the concept of SEZs but these were created for Chinese investment rather than foreign companies.
“For Africa we want to say come, you do not pay any taxes, do everything you can, go away and we remain poor because when we give them tax incentives we are not only giving relief to the company but also transferring our taxing rights as a country to the country of origin of that company,” Pasi said.
“I think we need to take a step back and not be emotional about taxation and development. We should also be in a position to do a cost and benefit analysis of what we have done in the past. When you give an incentive what do you want to achieve? Have we achieved what we want to achieve because we have a tendency of just giving tax incentives without taking stock of what we have achieved?”
Pasi called on the government to focus on encouraging domestic incentives and streamlining taxes that were stifling local companies.
“Let us allow individual people to do their businesses and support them where they need support. We have created so many taxes, like at the ports of entry you have your EMAs, you have so many other divisions stepping over each other’s feet trying to charge this trying to charge that, we are killing and stifling our own people, so let’s allow people to trade and then they will pay taxes,” he said.