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Zimbabwe: Proposed Tax Incentives for Investors in Special Economic Zones

The Special Economic Zones Act [Chapter 14:34] (the SEZ Act) was enacted on the 1st November 2016 as part of the Zimbabwean government’s efforts encourage investment in specifically designated areas. This shall be done through special arrangements such as laws that apply differently to the rest of Zimbabwe.

The SEZ Act establishes the SEZ Authority whose powers are provided for in the Schedule to the SEZ Act. In terms of section 56 of the SEZ Act, investors who are licensed under the SEZ Act shall be exempt from the provisions of the Indigenisation Act [Chapter 14:33]. Further, they shall not be required to obtain a licence for the import of goods mentioned in the SEZ Act.

The Ministry of Finance and Economic Development earlier this month announced its proposed tax incentives for investors operating in Special Economic Zones.

Corporate Tax

Exemption for the first five years of operation and a corporate tax rate of 15% applicable thereafter.

Special Initial Allowance

To be allowed at the rate of 50% of cost from the first year, and at the rate of 25% in the subsequent two years.

Employees’ Tax

Specialised expatriate staff to be taxed at a flat rate of 15%.

Non-Residents Withholding Tax on Fees

Exemption on fees for services that are not locally available.

Non-Residents Withholding Tax on Royalties


Non-Residents Withholding Tax on Dividends


Customs Duty on Capital Equipment

Capital equipment for SEZs imported duty-free.

Customs Duty on Raw Materials

Inputs which include raw materials and intermediate products imported for use by companies set up in the SEZs will be imported duty-free. Exemption will not apply where such raw materials are produced locally.

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