Transporters call for level playing field

Tuesday June 28 2022
Truck pic

Namanga border between Kenya and Tanzania clears about 250 trucks daily. PHOTO | FILE

Dar es Salaam. Parliament’s Budget Committee yesterday asked the government to introduce charges on commercial vehicles from the Southern African Development Community (SADC) entering Tanzania in response to fees Tanzanian transporters are subjected to when travelling within the bloc.

It is estimated that goods destined for neighbouring SADC member states account for up to 75 percent of all transit goods that pass through Tanzania’s ports.

The committee recommended the introduction of three different fees to align with charges Tanzanian transporters were subjected to when their vehicles go to any of the other 15 SADC member states.

Data shows that the value of cargo passing through Tanzania to Zambia, the Democratic Republic of Congo (DRC) and Zimbabwe is estimated at $1.5 billion annually.

Tabling the committee’s recommendations in Parliament, the panel’s chairman, Mr Sillo Daniel Baran, said the team agreed with the proposal to charge $10 for every 100 kilometres travelled in the country by commercial vehicles from other SADC countries.

However, he said analysis had shown that some SADC countries charged other fees that were not in force in Tanzania such as the $100 parking fee Tanzanian lorries were charged in other SADC countries.

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“There is a $60 annual carbon emission fee, as well as a $100 toll gate levy charged shortly after lorries arrive at borders,” said Mr Baran.

“Honourable speaker, based on the principle of reciprocity, the committee is advising the government to introduce similar fees that should be paid by lorries from neighbouring countries,” he added.

Commenting on the amendment of the Electronics and Postal Telecommunications Act, Cap 306, Mr Baran, who is also the Babati Rural MP, said the government intended to introduce a levy for decoders of between Sh1,000 and Sh3,000 to paid through the purchase of bundles.

“However, after discussions, it was concluded that the amounts were too high. The committee has proposed a Sh500 to Sh2,000 tax that has been accepted by the government,” he said.

Regarding amendment of the Value Added Tax (VAT) Act 2014, he said the government had proposed measures aimed at stimulating production in agriculture, livestock and fisheries sectors.

They were also intend to protect domestic industries, reduce prices of essential commodities such as edible oil and recognising taxable digital services.

He said upon consultations, the government agreed to amend some areas to be in line with its obligations without affecting the VAT systems.

“However, the committee still advises the government to withdraw its intention to abolish tax exemption on air charter services,” he said.

“The move will increase tourists’ costs of using air charter services. Tanzania will also be regarded as an expensive tourist destination compared to neighbouring countries that have exempted VAT on air charter services,”Mr Baran added.

According to him, the move would adversely affect the aviation tourism industry that has seen a decline in air charter services in the last two years.

Despite putting a six-month grace period for the execution until December 2022, the committee emphasises that the exemption should remain, according to him.

He said regarding the Tax Administration Act, Cap 438, the committee analysed tabled proposals, understanding that the government intended to, among other things, establish procedures to register citizens above 18 years and provide them with a Tax Identification Number (TIN).

Also, it aims to impose compulsory conditions, requiring purchasers and sellers of products or services to submit their TIN.

“After in-depth discussions, the committee advised the government to lift the compulsory provision of TIN when purchasing or selling products because the condition could be hardly implemented under the country’s context,” he added.

Mr Baran assured the government that reports that there was a move to impose tax payment to all citizens above 18 years was false and hatred.

According to him, the move aimed at recognising citizens above 18 years in the tax system who upon being employed or started businesses, they will be relieved of the inconveniences of looking and registering new TIN.

Regarding proposals to amend the Government Loans, Guarantees and Grants Act, Cap 134, Mr Baran said the government aimed to rationalize debt sustainability measurement indicators and align them with international indicators.

“Although debt measurements using the ratio of domestic revenues isn’t an international criteria, the committee advised the government to continue using the criteria because it is important in the government debt serving,” he said.

Earlier, tabling the Finance Bill 2022, Finance and Planning minister Mwigulu Nchemba said the government was working on the absence of procedures to be followed on unclaimed assets, especially from mobile phone networks.

“I would like to inform Parliament that the government through the ministry of Finance and Planning is finalizing the enactment of the Supervision of Abandoned Financial Resources Act,” he said.

According to him, the act expected to enact legal procedures for supervision of unclaimed assets is expected to be completed in the 2022/23 financial year.