Animal feed importers react to tax scrapping

Dar es Salaam. Importers of animal and poultry feed additives have advised the government to encourage local production in order to enhance competitiveness.

Their call comes following the government’s proposal to scrap value-added tax (VAT) on the products.

Tabling the Budget for the 2018/19 financial year in Parliament last Thursday, the minister for Finance and Planning, Dr Philip Mpango, said the exemption is meant to encourage modern livestock keeping and increase contribution of the sector to the economy.

Reacting to the budget proposal, some importers told The Citizen that the government’s move will reduce the cost, but it could be complemented by local processing, which will also create jobs for Tanzanians.

“The budget is laudable, but to improve this sector, the government should consider helping local investors to venture into the production of quality animal feeds and encourage farmers to produce raw materials for local factories,” said Prof Faustine Lekule, the managing director of International Tanfeeds Ltd.

He said that the government needed to build mechanisms to encourage soya beans farmers to produce abundantly because the crop was one of the main animal feeds raw materials.

The founder of the Tanzania Graduate Farmers Association (TGFA), Mr Stephano Kingazi, said the local industries in the sector will also employ more Tanzanians and hence contribute to economic growth.

“The budget indicates how the government is trying to encourage more importation of animal and poultry feeds additives, but we needed to encourage establishment of more factories for production of animal feeds. This, I think, will improve the country’s economy,” he said.

The head of environmental management unit at the ministry of Agriculture, Ms Shakwaanande Natai, said that the government was already encouraging the local investors to venture into animal feeds production.

“Exempting VAT is one of the efforts by the government to encourage more investors to venture into the business but it also gives farmers a chance to practice modern livestock keeping to mitigate environmental challenges,” she said.

She also asked the stakeholders interested in producing quality animal feeds to seek government help where necessary as it will be a way of promoting the government’s industrialisation drive.