Apathy killing off interest in govt datacentres

Mistrust, lack
of resources 

Apathy hovers over
govt datacentres.

Friday, Feb 28th

Legal experts question Zim's tax exemptions for Huawei

Legal experts question Zim's tax exemptions for Huawei

Zimbabwe's decision to grant tax breaks and back date refunds for Chinese tech firm Huawei has been criticised by legal experts who argue that this disadvantages local companies and other taxpayers.

The Southern African country continues to lean on China for its tech programs. The most recent example of this was when TelOne partnered with a Chinese company to help set up Zimbabwe's first computer assembly plant.

Huawei is considered a major tech player in Zimbabwe because it provides network equipment used to upgrade the platforms of mobile phone operators NetOne and TelOne.

Funding for these network expansion and upgrade programs is being provided by the Export Import Bank of China.

Legal expert Fadzai Mahere said on Wednesday that she was "disgusted by the fact that (Zimbabwe has) given a rich, Chinese tech giant, Huawei a tax break that dates back to 2009 in circumstances where local corporates and individuals are choked to death" by the Zimbabwe Revenue Authority.

A 2019 government gazette notes: "With effect from the 25th August, 2014, the receipts and accruals of Huawei Technologies Co... are approved ... as being exempt from income tax on any receipts and accruals".

Additionally, last Friday, the government published a statutory instrument which further backdated the tax exemption, which will culminate in tax refunds for the period between 2009 and 2014.

Statutory Instrument 24 of 2020 amends section one of the 2019 SI "by deletion of the words 25th August 2014 and substitution with the words 30th December 2009".

This applies to exemptions and refunds of Value Added Tax.

The government will pay refunds on income tax backdated from 2014 to 2009 under Statutory Instrument 25 of 2020, also published Friday.

Other analysts also questioned the granting of tax exemptions to Huawei as "it is not building any factories" or creating meaningful jobs.

However, legal resource organisation Veritas explains that the tax exemptions and refunds "give effect to the Framework Agreement between the Government of Zimbabwe and the Export-Import Bank" of China.

They confer "taxation privileges" for the purposes of NetOne Cellular Limited and TelOne Limited infrastructure modernisation projects conducted using funds provided by the Bank.

The Statutory Instruments "exempts Huawei's receipts and accruals under the projects from income tax, non-resident tax on fees and capital gains tax".

Veritas adds that regulatory instruments also provide for "VAT refunds for the benefit of Huawei, NetOne and TelOne in respect of goods and services purchased for the projects using funds" provided by the Bank.

ALSO ON ITWEB AFRICA

Apathy killing off interest in govt datacentres Published on 24 February 2020

Experts highlight lack of infrastructure, mistrust and skilled employees.

Global blockchain alliance to support Africa's aviation parts industry Published on 18 February 2020

Stakeholders in Maintenance, Repair and Overhaul (MRO) chain to demonstrate how technology can be used to digitally manage parts.