Tanzania increases duty on import

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Tanzania increases duty on Goods

In its resolve to protect local industries, Tanzania has increased duty on almost three quarters of the imported goods.

Kenya had also announced similar measures, but on a smaller scale, a decision that would have sweeping changes in the East African Community common external tariff (CET) regime.

Kenya said it was important to grow local industries and increase production while protecting producers from cheap imports.

Last month, finance ministers from the East African Community agreed to effect changes to the CET and make amendments to the EAC Customs Management Act 2004, to protect local industries and farmers from cheap imports of items like sugar, maize, wheat and rice, as well as Customs-related taxation measures.

However, only Tanzania has sought to fully implement these changes in the 2018/19 fiscal year, with Kenya only proposing to implement three of the proposed 25 changes.

Uganda and Rwanda have not proposed any changes in the budgets delivered on Thursday.

The current CET is based on three bands: 25 per cent for finished goods, 10 per cent for intermediate goods and zero per cent for raw materials and capital goods, with a limited number of products on the “sensitive goods” list, which attract rates above the maximum 25 per cent.

The three-band tariff package has been blamed for killing competitiveness of local businesses and obstructing intra-regional trade by forcing them to pay duty of 25 per cent on some imported inputs which should ordinarily attract zero per cent or 10 per cent duty.

The EAC CET was last reviewed in 2010, but the three-band scheme was retained.

Now traders dealing in sugar, sweets, edible oil, safety matches, steel and iron products, chocolates, tomato sauce, meat, sausages, biscuits and mineral water will face higher tariffs in Tanzania, as the country increased duty by between 10 per cent and 35 per cent.

More: East Africa

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