Why has Land for United Fertiliser Company been Declared an Economic Zone?
For tax incentives and import duty waivers purposes!
Operating within an Economic Free Zone (also known as a Multi-Facility Economic Zone or MFEZ) or Industrial Park in Zambia offers investors numerous advantages.
Here are some of the key benefits:
1. Fiscal and tax incentives
Corporate Income Tax: Reduced rates or exemptions, including a 0% tax on export profits and dividends for the first 10 years for companies meeting eligibility requirements, followed by reduced rates for subsequent years.
2. Customs Duties and VAT:
0% import duty rate on capital equipment and machinery for five years.
3. Exemption from customs duty and VAT on imported raw materials, equipment, and other specified goods for the development of MFEZs and Industrial Parks.
4. Zero-rated VAT on exports of taxable products, while still allowing input VAT claims.
Other Tax Benefits:
● Investment Deduction Allowance: 100% deduction on capital expenditure for buildings and/or machinery.
●Accelerated Depreciation: Investors can depreciate capital expenditure on plants, machinery, and equipment at significantly higher rates (50%-100%).
● Withholding Tax Exemptions: No withholding tax on management fees, consultancy, and interest repayments to foreign contractors.
●Exemption from License Fees and Local Government Fees: SEZ enterprises may be exempt from various licenses and fees levied by county governments, including advertisement fees and business service permit fees.
Administrative benefits and operational support
●Streamlined Processes: Simplified and expedited regulatory procedures, including quicker work permits and customs clearance.
●Reduced Documentation: Reduced paperwork for licensing procedures.
●Single-Window Clearance: A single point of contact (the ZDA or SEZ Authority) for information, permits, and project approval, simplifying interactions with various government agencies.
●Work Permits: Entitlement to work permits for up to 20% of full-time employees, with the possibility of additional permits for specialized sectors.
●Land Acquisition: Assistance with land acquisition.
●Utility Connections: Fast-tracked utility connections.
●Investment Protection Agreements (IPPAs): Provide stability and protection against abrupt policy changes.