Fresh spat leaves trading in EA hanging in the balance

Nairobi. The Tanzanian government has rejected Kenya Revenue Authority (KRA) backing of locally made goods in a fresh trade spat that has seen Dar es Salaam impose barriers on confectionery products like chocolate, ice cream, biscuits and sweets.

Tanzania slapped a 25 per cent import duty on Kenyan companies citing the use of imported industrial sugar in the products.

However, KRA provided documents to prove the share of imported sugar in the Kenya-made goods was within the levels that grant the products tax-free passage to Uganda and Tanzania.

The East Africa Community (EAC) common market made up of Tanzania, Kenya, Uganda, Rwanda, South Sudan and Burundi allows for free movement of locally manufactured goods within the bloc.

“The denial of entry for Kenyan goods into Tanzania continues despite KRA’s intervention to clarify the matter to its Tanzanian counterpart,” Kenya Association of Manufacturers said on Thursday.

“KRA has provided detailed information with evidence that manufacturers of above affected products, import industrial sugar for tariff number 1701.99.10.”

Tanzania and Uganda revenue bodies have, however, accused the Kenyan manufacturers of tilting competition in their favour by using industrial sugar imported under a 10 per cent duty remission scheme.

The region does not produce industrial sugar.

Last week, Kenyan firms accused the two countries of using the customs taxes to restrict trade.

“Despite these and other multiple attempts, Tanzania has continued to bar Kenyan products and has additionally denied the delivery these goods under bond,” KAM said, adding that the move had forced Kenyan firms to scale down production.

“The refusal to allow entry of our products into Tanzania has impacted business negatively.”

This is not the first time certificates of origin from Kenya are being rejected in the region.