Envoy: Tax, permit issues put off Chinese investors

Dar es Salaam. Issues related to tax and residence permits are frustrating Chinese investors interested in doing business in Tanzania, the Chinese ambassador, Ms Wang Ke, has said.

Ms Wang was speaking during a forum aimed at promoting investment and trade partnerships between Chinese and Tanzanian companies held in the city yesterday. It brought together 136 companies from Tanzania and 70 from China.

The envoy stressed the need for increasing efforts to improve the business environment in the country. The business community has repeatedly complained about overstated tax estimates and multiple taxes and absence of a one-stop centre that makes it convenient for foreign investors to register and apply for residence permit in one place.

“We understand that the government has noticed and attached great importance to this by taking measures to make improvements,” she said.

According to the ambassador, China has increased its investments in the country, overtaking the UK as the number one source of investments in Tanzania. She said Chinese Investment volume has reached $7 billion in sectors that include energy and infrastructure and that Chinese companies were ready to invest in other areas including the cashew nut sub-sector.

For his part, Tanzania Private Sector Foundation (TPSF) Executive Director Godfrey Simbeye said it was important that the government worked to improve the business environment to attract more investors. “The government is trying but… it is discouraging that a Chinese investor producing tiles has to compete with fake products for markets,” he said.

For his part, the Minister for Trade, Industry and Investment, Mr Joseph Kakunda, said the government has noted all the concerns raised by the ambassador and they were being addressed. He said the government was willing and ready to provide the required support.

He said the government has introduced an online portal where foreign companies can apply and register from their countries of origin before coming to Tanzania for final processes.

On trade between the two countries, the minister said: “We have been experiencing a huge trade imbalance by importing more of value added products and that is why we are looking for investors in agro processing, manufacturing and other vital sectors,” he said.

He said the country produces 275,000 tonnes of cashew nuts annually and has the capacity to add value to 127,000 tonnes. However, he noted so far only 30,000 tonnes are processed for value addition.

Meanwhile, the Chairman of the China Council for Promoting South-South Cooperation Lyu Xinhua said they have launched an English website for international trade where different countries can reach partners for possible investments.