ZIMBABWE – VarunBeverages Zimbabwe (Pvt) Ltd, a soft drink manufacturer and Pepsi bottler in the country has been declared a special economic zone (SEZ) as an incentive from
The announcement was made by the Zimbabwe Special Economic Zones Authority chief executive officer Mr Edwin Kondo through an Extraordinary Government Gazette, reports The Herald.
“It is hereby notified that, in terms of section 20 (1) of the Special Economic Zones Act (Chapter 14:34), the Zimbabwe Special Economic Zones Authority, has declared arun Beverages (Zimbabwe) (Private) Limited as a special economic zone,” said Mr Kondo.
Nqobizitha Mangaliso Ndlovu, Minister Industry and Commerce, said that government decided to declare Varun Beverages a special economic zone considering its ambitions to boost local production.
“They are expanding; they are putting a plant which is worth more than US$23 million and they have to improve their reach out in the country, their access.
They also want to improve exports because they have already started exports so a special economic zone, really, grants them corporate tax relief not VAT relief for a period of five years.
At least if people are bringing in such investment, as Government we also make an effort to support them through such kinds of incentives. That is mainly the implications of the special economic zone,” said Minister Ndlovu.
The government introduced the special economic zones in a bid to lure more investors into the country.
Through SEZs, an entity in the country enjoys financial policies including corporate tax exemption for the first five years of operation and a corporate tax rate of 15% thereafter.
Additionally, the firm may also be entitled to specialised expatriate staff tax at a 15% flat rate as well as duty-free importation of capital equipment and exemptions for non-residents withholding tax on royalties.
Raw materials and intermediate products imported for use by companies in special economic zones are also imported duty-free, but the exemption does not apply where raw materials are produced locally.
Currently, Varun beverages has dominated the soft beverage market in the country following the absence of Delta Beverages- bottler of Coca-Cola products due to shortages of foreign currency that has adversely hampered its operations.
Last Year, Varun Beverages commissioned a US$40 million beverage plant in Zimbabwe with a capacity to produce 600,000 bottles on a daily basis.