Investment Incentives and Legal Certainty: Discretion Under Sections 31 And 33(1), of the Investment, Trade and Business Development Act No. 18 of 2022

Abstract

Every legal system seeking for foreign investment must answer the same fundamental question: how much should the law guarantee up front and how much should be left up to the discretion of those in charge at any given time? A substantial and diverse body of research including administrative law theory, public finance, international investment law, and comparative regulatory design revolves around this subject. As a result, academic and policy literature frequently discuss foreign and domestic direct investment as a key driver of economic expansion in emerging nations. In addition to infrastructure and macroeconomic stability, governments fight for this capital through legal design, which refers to the laws, rules, and administrative procedures that dictate how an investor's relationship with the state will actually develop after capital has been invested. The most recent version of this design effort is Zambia's Investment, Trade and Business Development Act No. 18 of 2022, a consolidated statute meant to support, among other things, an effective, coordinated, and efficient private sector-led economic development strategy. Exemptions from taxes and duties under Part VI of the Act, which are primarily governed by sections 31 and 33, are among the incentives offered by the Investment, Trade and Business Development Act No. 18 of 2022. Section 33(1) gives the Agency the authority to recommend investors to be granted tax incentives to the Minister in charge of finance if it concludes from an investor's commitment that the investor would engage in real skills transfer and employ citizens. Further, Section 31 states that the Minister will grant any relief or exemption to which an investor qualifies under Part VI only after the Agency certifies that the investor has fully complied with the Act and any applicable conditions. In other words, rather than making the incentive automatically accrue to any investor who satisfies a fixed, published rule, both provisions make the delivery of a promised incentive dependent on a further administrative act. a recommendation in one case, a certification, and an act of ministerial effecting in the other. It is on this premise that this research seeks to interrogate these discretionary powers vis-via investment incentive and legal certainty in relation to the provisions of section 31 and 33(1) of the Investment, Trade and Business Development Act No. 18 of 2022,