Budget 2021/22: Transport players express hope as budget tabled

Thursday June 10 2021
Budget pic

The minister for Legal and Constitutional Affairs, Dr Mwigulu Nchemba, presents in Parliament on behalf of the minister for Finance and Planning some information on the proposed five-year National Development Plan (2021/2022 - 2025/26) and the State Budget for FY-2021/2022, in Dodoma yesterday. PHOTO | JONATHAN MUSSA

By Hellen Nachilongo
By Rosemary Mirondo

Dar es Salaam. Operators of transport companies are hopeful that Finance and Planning minister Mwigulu Nchemba will come up with fiscal measures that will create a level playing field in the market.

They remain hopeful that Dr Nchemba will reduce the import duty for passenger buses from the current Sh95 million each.

With a life span of between four to five years, bus operators say the tax was too high for them to make business sense out of it.

“Our long term cry is import duty, we are optimistic that the minister will consider reducing import duty from Sh95 million to the previous Sh40 million each,” they said.

The import duty on passenger buses, they urge, could also be reviewed in such a way that the government should adopt a system that takes into account the differences in the size of the business.

Tanzania Bus Owners Association (Taboa) member of executive committee Mustapa Mwalongo told The Citizen that they have reduced the importation of buses due to high taxes.


He said: “Before the import duty was high we imported 50 to 40 buses annually, but currently we cannot import more than 15 buses.”

According to him, with the current situation some operators stay for four years without buying new buses.

Tanzania Truck Owners Association (Tatoa) vice chairman Elias Lukumay said they expect the minister to come up with a system that categorises cargo transporters according to the business size.

“By doing so, it will help them pay tax with less pressure. In countries like Zambia, Malawi and Zimbabwe, cargo transporter were categorised and they pay taxes according to their size of businesses unlike here,” he said.

For his part, Tanzania Freight Forwarders Association (Taffa) President Edward Urio said their expectations in this coming budget is that the government will review the Tanzania shipping Agency Corporation (Tasac) Act of 2017 as well as the VAT Act of 2019.

Explaining about the Tasac Act, he said, the government needs to review the Act because it is turning an institution that is meant to be a regulator into a player at the same time.

“The Act’s amendment has extended Tasac’s mandate into private sector activities,” he said.

Towards the end of June 2019, the Parliament endorsed the amendments that enable Tasac to also handle tankers, car carriers, cruise vessels, casual callers, chartered vessels and military ships as agents.

But this call comes at a time when the government is already holding talks with private clearing and forwarding agencies before a state-run Tasac starts executing the extension of exclusive mandate in clearing of some goods.

The additional items are fertilisers, industrial and domestic sugar, cooking oil, wheat, oil products, gas, liquefied gas and chemicals related to the products.

With the section 7 (1) of the Tasac law, the state-run agency is exclusively mandated to carry out clearing and forwarding functions relating to the import and export of minerals, mineral concentrates, machinery and equipment for the mining and petroleum sector, products and/or extracts related to minerals and petroleum; arms and ammunition, live animals and government trophies. Tasac was to start the execution of its extended mandate on July 15, 2021 but the government has delayed it for more discussions.

With the amendments being done in 2019, the execution of the services was arranged to start on March 15 this but it was delayed after the private freight forwarders had expressed worries.

Mr Urio further noted that the VAT Act of 2019 also needed review as currently it was cumbersome requiring all cargo for government projects to get exemption through government notice before they can be cleared.