Zim unveils rebate on cannabis equipment
Zimbabwe has introduced a rebate on capital equipmentimported for medical cannabis production in a development expected to spurinvestment into this fledgling industry.
According to the Statutory Instrument 115 of 2024 (Customsand Excise (General) (Amendment) Regulations, 2024), the Zimbabwe RevenueAuthority (Zimra) shall grant rebates on capital equipment imported for the productionof medical cannabis from January 1, 2023 to December, 31 2024.
As stated in the Government gazette published last Friday,the capital equipment import rebate for cannabis production has a time limit.If the equipment is not operational within six months of receiving the rebate,the tax exemption will be revoked.
In such cases, the full import duty becomes duefrom the initial rebate date.
To qualify for this rebate, applicants must be registeredtaxpayers with Zimra and possess a valid tax clearance certificate.
Once a company receives the rebate, it cannot sell ordispose of the equipment within five years of import without written permissionfrom the Zimra commissioner.
Permission may be granted, but a fee may apply. The feeconsiders the equipment’s depreciation since its import under the rebateprogramme.
If permission for disposal is granted, the Zimra commissionerhas the authority to determine a reduced import duty fee.The fee takes into account the equipment’s depreciationsince it would have been imported under the rebate programme.
Essentially, the longer one owns the equipment, the less thefee will be.Zimbabwe’s cannabis production is in its early stages, butit has the potential to be a significant industry with the right support andregulations.
Cannabis has a longhistory in Zimbabwe. It was illegally used for medicinal purposes by traditionalhealers and as a smoking drug and its planting occurred outside legalframeworks.
Zimbabwe, Africa’s largest tobacco producer, is seeing thesector threatened by anti-smoking campaigns. In response, the Government is exploring cannabis as apotential replacement crop. As such, the Government has asked the Tobacco Research Board to look into the viability of large-scale cannabis production.
Kumbirai Mateva, a plant breeder with the Tobacco Research Board, is on record saying TRB’s decision to research cannabis follows the push by the World Health Organisation to discourage tobacco consumption.
“We see this as an opportunity to lead in agricultural innovation and sustainability, ensuring that Zimbabwe remains at the forefront of progressive farming practices,” Mr Mateva was quoted in the media as saying.
“We are excited about the prospect on the horizon as we draft a protocol for a new hemp variety, which we expect to launch in the near future,” he said.
The shift is supported by the 2018 legalisation onmedicinal and medical cannabis production, which opened the doors for licensed companiesto cultivate and process the plant.
The global cannabis industry could be worth US$272 billionby 2028, according to Barclays analysts, and Zimbabwe has said the countrywants at least US$1 billion of that –almost the same as what it currently makesfrom its top agricultural export tobacco.-herald
