11 Sep 2013 06:50
By Maggy Thomas
TIANJIN, 11 SEP (NAMPA) - Minister of Trade and Industry Calle Schlettwein said many companies that are enjoying Export Processing Zone (EPZ) incentives are not performing to Namibia's expectations.
We are busy reviewing the situation where we want to put the companies with EPZ status into a more performance-based situation so we can monitor and evaluate their performance, the minister said in an interview with Nampa here on Tuesday.
He warned that if the companies with EPZ status are not performing to the country's expectations, the line ministry will recall or revoke their tax reward incentives.
The government adopted an Export Processing Zone regime to serve as a tax break for export-oriented manufacturing enterprises in the country in exchange for technology transfer, capital inflow, skills development and job creation.
The EPZ initiative started in 1996.
We have realised that only a few of these companies have in fact managed to live up to the expectations of building up production capacity, transferring skills, and job creation, he stated, emphasising that many of the companies with EPZ status are just enjoying holiday incentives.
EPZ enterprises are exempted from corporate Income Tax, duties and value-added tax (VAT) on machinery, equipment and raw materials imported into Namibia for manufacturing purposes.
The only taxes payable are personal Income Tax on employees' income, as well as the 10 per cent withholding tax on declared dividends for non-resident shareholders.
In addition, EPZ enterprises are allowed to hold foreign currency accounts at commercial banks, as well as to repatriate their capital and profits.
Meanwhile, Schlettwein and the rest of the Namibian delegation, led by Deputy Prime Minister Marco Hausiku, paid a visit to Chinese Government-owned Tianjin Economic Development Area (TEDA) in Tianjin town, situated north of China on Tuesday.
The aim of the meeting was to find a common ground on how to develop industrial parks in Namibia.
Namibia currently has 22 industrial parks.
Established in 1984, TEDA is one of the successful economic zones in China where thousands of foreign enterprises from more than 100 countries operate.
The industrial zone is positioned to serve as an advanced manufacturing and modern service industry, driven by both investment and technology.
TEDA's management promised to visit Namibia soon to familiarise itself with the Port of Walvis Bay, where the Namibian Government is planning to establish another industrial park.
TEDA wants to extend cooperation with Namibia, but first we have to find out if there is any opportunity to cooperate in that aspect, TEDA chairman Xu Hongxing told the Namibian delegation.
On his part, Hausiku said it is a learning process.
'Our visit is not an ordinary visit, it is a visit linked to our national development planning at home, specifically with the development of industrial zones in the country. We mean business here,' he stated.
The Ministry of Trade and Industry has already approved the creation of an industrial zone at the coast.
The industrial zone will be situated in Walvis Bay, which already has a harbour, international airport, and is connected to the country's railway line.
In that coastal town, there is also a possibility of creating all facilities in rendering services and provide a space for future and further development.
Walvis Bay is a proper site connected to road and rail infrastructure, and it contains significant resources such as salt, marine resources, dimension stones and agricultural products.