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Indigenisation and economic empowerment policies are not cast in stone and foreigners can hold majority shareholding in any enterprise depending on the nature of their investment, the President has said. President Mugabe said this during celebrations to mark the country’s 34th Independence anniversary at the National Sports Stadium in Harare last Friday.

“Now in implementing the indigenisation programme, there has been some confusion. We have said where big companies have been established mainly on the basis of our natural resources, in mining, in agriculture, manufacturing, we demand that Zimbabweans — either through the Government or through our people — should have 51 percent or not less than 51 percent.

“But if a company is established and is getting raw materials from outside and the raw materials are not Zimbabwean, take the case of aluminium, we don’t have raw materials for it if the raw materials come from Tanzania, which has it and if a company establishes itself here in Willowvale, we cannot demand 51 percent.

“You can negotiate with the company in the usual way what percentage we should have and it’s up to the company and yourselves establishing the percentages respectively you should share.

“But we cannot demand 51 percent (where) we don’t have materials. These materials are coming from outside and the machines are also coming from outside and we have no basis on which we can demand 51 percent except to say the locality of the company is ours,” he said.

Zimbabwe enacted the Indigenisation and Empowerment Act to boost indigenous participation in the mainstream economy and to ensure citizens benefit from the country’s vast natural resources.

President Mugabe added that professional partnerships in fields such as medicine and law were also exempt from the 51-49 percent ownership structure.

“In so far as partnerships of a professional nature – chiremba vaiita surgery yavo, a lawyer establishes his own practice apa nemumwe wake hapana there is no room those are not affected by indigenisation. At any rate we will be there to give answers to see whether a company that is being proposed falls into the area of indigenisation and empowerment,” he said.

President Mugabe told mining companies to establish community share ownership trusts.

“The community share ownership trusts, these must be created wherever any big mining is taking place and no mine is exempt because every mine geographically damages the area in which it is located so there have to be these community trusts in all mining areas,” he said.

While some companies, notably Zimplats, have readily complied with the CSOT requirement, those mining diamonds in Marange have been dilly-dallying.

The five diamond miners are still to pay the US$50 million they pledged to the Marange-Zimunya CSOT when President Mugabe launched it in 2012.

Recently the Zimbabwe Revenue Authority proposed that Government should get a percentage of mining companies’ production as a form of tax to widen the country’s revenue base.

Zimra Commissioner-General Mr Gershem Pasi suggested this at the inaugural National Business Council of Zimbabwe symposium in Harare.

He said, “Mining should contribute meaningfully to the tax base but the taxation rules we use were designed in the 1920s by colonial masters who wanted to make sure their countries benefited more than the country where the mineral was coming from.

“The rules should change so that over and above the 51 percent indigenous shareholding in these mining companies, from whatever they take from the ground, a certain percentage of the mineral should go to the Government as tax.”

He said this would widen the tax base and guarantee Government gets real revenue instead of waiting for royalties and dividends, which may not come.

“Minerals in Africa are contributing less than three percent to the host countries’ economies yet they contribute more than 75 percent to the economies of those countries they end up in,” Mr Pasi said.

Source : The Herald

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