In a move aimed at revitalizing the furniture manufacturing sector, the Government of Zimbabwe has introduced a duty rebate on goods imported by furniture manufacturers.
The initiative, outlined in Statutory Instrument 187 of 2024, seeks to enhance capacity utilization, attract fresh investment, and increase employment opportunities.
Under the new regulations, only approved manufacturers will qualify for the furniture manufacturers’ rebate. The eligibility criteria require applicants to be registered with the Zimbabwe Revenue Authority (ZIMRA) and possess a valid tax clearance certificate.
Application and Approval Process
To apply for the rebate, manufacturers must submit an application followed by a thorough inspection of their premises and machinery. The findings from these inspections will be reviewed by ZIMRA, which will decide on the registration.
Key procedural highlights include:
- Annual Renewal: Approved manufacturers must pay the prescribed registration renewal fee annually, on or before January 31.
- Fee Adjustments: Registrations granted after June 30 of any year will attract a 50% fee.
ZIMRA retains the right to reject applications if it determines that imported goods cannot be adequately monitored or if any regulatory requirements are unmet.
Reporting Requirements
Manufacturers benefiting from the rebate are required to submit an annual report to the Minister of Finance, Economic Development, and Investment Promotions. The report must highlight the positive impact of the rebate, including:
- Increased employment levels.
- Improved capacity utilization.
- New investments made.
- Growth in production output.
- Research and development initiatives undertaken.
The annual report is due within 30 days following the end of the manufacturer’s 12-month operational period. Failure to submit the report in the specified format will result in immediate withdrawal of the rebate. In such cases, manufacturers will be liable for repaying the rebated revenue and may face penalties for non-compliance.
Boosting a Declining Sector
This intervention comes at a critical time for the manufacturing sector, which recorded significant challenges in 2023. According to the Confederation of Zimbabwe Industries’ 2023 Annual Manufacturing Survey, the sector experienced an average output decline of 11%, with some subsectors bearing the brunt of the downturn.
By introducing this rebate, the government aims to reverse the decline, incentivize investment, and encourage local manufacturers to increase their production capabilities.
The measure is expected to provide financial relief to manufacturers while fostering long-term growth through better capacity utilization and innovation.
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