Review to kick-start industrial zones

Posted On Thursday, 31 December 2009 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

The Department of Trade and Industry is conducting a review of policy on industrial development zones, which critics say do not offer enough incentives to attract investors.

Tumelo ChipfupaCape Town — The Department of Trade and Industry is conducting a review of policy on industrial development zones (IDZs), which critics say do not offer enough incentives to attract investors.

The department accepted that its policy on the zones was weak and a stronger legislative framework was needed, deputy director general of enterprise development Tumelo Chipfupa said yesterday.

Institutional arrangements were also not up to scratch, while inadequate funding meant the zones were slow to develop and not very successful in attracting investors compared with international counterparts.

SA’s flagship IDZ at Coega had received the bulk of government funding. Chipfupa said the idea was to draw lessons from how the IDZ programme had been administered so far, and look at ways of improving it.

One conclusion reached was the importance of a sound regulatory environment that did not make it burdensome for businesses to start up operations.

To achieve this, the work of the three spheres of government had to be well co-ordinated and institutional arrangements created to expedite employment, environmental impact assessments and the like.

“The institutional set-up is not optimum at present and neither does the legislative framework clearly delineate oversight responsibilities to the different spheres of government,” Chipfupa said.

The policy review would determine whether specific IDZ legislation was required.

Chipfupa said a benchmarking exercise was conducted with the regimes in Malaysia, Taiwan and the Philippines.

An analysis of the contribution made by IDZs to the economy had also been undertaken by the University of Pretoria.

The whole incentive structure for IDZs would have to be looked at, but Chipfupa would not say whether this would include tax incentives; some have suggested these are vital if these zones are to be successful.

The Democratic Alliance (DA) has been pushing for IDZs to be converted into fully fledged export-processing zones, but Chipfupa said that this was not on the cards.

DA trade and industry spokesman Kobus Marais has criticised the government’s IDZ policy for having failed to deliver on the promised levels of investment and job creation. Incentives were inadequate.

In terms of DA policy, only labour-intensive, exporting industries would be allowed to operate in these zones.

They would be permitted to import machinery, equipment and raw materials duty-free, and the full repatriation of profits and capital would be allowed, to encourage foreign investment.

Zones would be exempt from “more onerous” labour laws, and new ventures would be supported by a sustained tax holiday.

But Chipfupa insisted that no relaxation of labour laws was on the cards.

 

Last modified on Thursday, 15 May 2014 10:08

Most Popular

SA property visionary John Rabie announces new global property joint venture

Mar 15, 2021
LX_LIVING_Lisbon_Portugal
Capital, the Geneva based property investment, development and asset management-business,…

Repo rate unchanged at 3.5%

Mar 25, 2021
Lesetja_Kganyago_SARB_Governor
The Monetary Policy Committee has decided against altering the repo rate, deciding to…

Court finds against EAAB in battle for FFCs

Mar 16, 2021
Tony C
In a scathing judgement handed down from the High Court on 15 March, the failure of the…

KZN residential property market poised for upswing

Mar 15, 2021
Sershin_Moodley_TUHF
Over the past three years, the KwaZulu Natal (KZN) property market has enjoyed…

SARB to hold but is a rate hike around the corner?

Mar 16, 2021
SARB_to hold_rate_hike
The South African Reserve Bank (SARB) is set to hold the repo rate at the 23-25 March…

Please publish modules in offcanvas position.