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NewsDay

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Irvine’s calls for 100% retention on exports

Business
IRIVINE’S Zimbabwe has called for a 100% foreign currency retention on its export proceeds as it bemoans a proposed tax on exports.

BY TATIRA ZWINOIRA

IRIVINE’S Zimbabwe has called for a 100% foreign currency retention on its export proceeds as it bemoans a proposed tax on exports.

This comes at a time when government prioritised production in the hope of bolstering the country’s foreign currency which can stabilise prices and the falling Zimbabwe dollar.

Speaking at the end of a Press tour of Irvine’s Zimbabwe’s facilities in Harare yesterday, the poultry firm’s chief executive officer David Irvine said the move to tax export proceeds would significantly hamper their ability to import critical raw materials.

“We are told that we are going to have to pay the tax on exports in foreign currency. I am not quite sure how that is going to work. It hasn’t been implemented yet, but we are told it is going to be implemented. In other words, if I export US$1 million, they are going to say the tax on that is 10%, US$100 000 in foreign exchange,” he said.

“If we do that, that is straight madness. You cannot tax exports. We have got to do more exports in this country, don’t tax it. Give people tax holidays for doing it, do it the other way.”

The call to not tax exports comes as Irvine’s has a monthly foreign currency requirement of US$45 million for its day to day operations including capital needs, an amount the firm is not earning.

Further, in terms of its split between local sales and exports, the company is currently exporting less than 10% of its output monthly.

The proposed tax on export proceeds comes at a time the company is required to surrender 20% of its export proceeds. Irvine called for a 100% retention on export proceeds.

“It is affecting us in that we lose 20% of our export earnings. Our export earnings would probably be in the region of US$4,8 million. Last year, I am not exactly sure, but it was about US$1 million, so we have gone up a lot and we are going to continue to push those sales. To be able to do it, I am going to need more inputs, stockfeed ingredients, vitamins and that kind of thing,” Irvine said.

“I am going to need money for the genetics. I have given a guarantee to the Reserve Bank of Zimbabwe that any extra money that we get from the export retention we are going to put in this firm in new technology to increase our egg production.”

He said eggs were in short supply, with a shortfall of 100 000 daily.

“We want to increase the throughput of the plant; I need foreign exchange for refrigeration primarily. We want to increase the capacity of the hatchery and we are putting the building up, it’s all local but the incubators need to come from America,” Irvine said.

Industry and Commerce minister Sekai Nzenza said they were in discussions with Irvine’s to see how they could assist the poultry firm.

Irvine’s Zimbabwe has a 70% local market share.