Eyebrows raised over Huawei's extended tax exemption
By Staff reporter | 06 Feb 2020 at 18:02hrs
LEGAL and ICT experts have raised eyebrows over government's recent move to backdate Chinese tech conglomerate, Huawei Technologies' income tax exemption to 2009 from 2014.
In Statutory Instrument (SI) 25 of 2020, Finance minister Mthuli Ncube updated SI 227 of 2019 which exempted the Chinese firm from paying tax since August 2014 to December 2009.
However, United Kingdom-based legal expert Alex Magaisa raised concern on how many favours Chinese firms were receiving from government.
"The Zimbabwean government has updated a decree (SI 25/2020) exempting Chinese company Huawei from paying income tax. The old decree (SI 227/2019) exempted Huawei from paying tax since August 2014. This has now been backdated to December 2009 — 11 years ago!" he tweeted.
"The opposition forces and civil society groups dealing with social-economic issues should really be taking a lead in these issues. These are matters of substance, happening well outside the headlines, but with a great deal of long-term consequences for the nation."
Added Magaisa: "When the Chinese count the chickens they gave us, we must be able to ask how many chickens they have kept through these tax exemptions. That would provide a fair balance sheet of our relationship. For the avoidance of doubt, the same applies to other foreign countries, too".
Huawei is a major service provider in Zimbabwe's telecommunications market.
This was revealed in March 2019 when Huawei, among others, stopped providing services for the maintenance and upgrading of their telecommunication infrastructure, leading to nationwide network disruptions.
The stoppage mostly affected TelOne and NetOne services as the Chinese firm is their main maintenance and upgrades service provider.
Zimbabwe Information and Communication Technologies chairman Jacob Mutisi called on government to extend such an exemption on income tax to more technology service providers.
"That is a positive move, but let's extend it to all ICT companies. The fact of the matter is ICT continues to be the economic driver," Mutisi said.
"The government call should also allow all ICT equipment to enter the country free of duty and this will encourage more investment in the ICT sector."