The private sector in East Africa has asked Tanzania to harmonise the preferential treatments it offers to transit goods as a way of encouraging use of the central corridor .
While Rwandan trucks transiting through the central corridor (Dar es Salaam Port) each pay $150 (Shs535,000); other East African member states such as Uganda are charged $500 (Shs1.7 million) per truck for goods in transit.
Mr Kassim Omar, the chairman Uganda Clearing Industry and Forwarding Association, who is also East Africa Business Council (EABC) vice chair for Uganda, said: “Indeed, the Dar es Salaam Port has improved. But they need to harmonise the transit fees to make doing business in the region less costly.”
Mr Omar, together with other EABC members, had paid a courtesy visit to ambassador John Kijazi, chief secretary, office of the president of Tanzania on Tuesday.
Value Added Tax
The EABC officials further urged the Tanzanian government to remove the recently introduced 18 per cent Value Added Tax (VAT) on ancillary services rendered to transit goods such securing, cargo inspection, preparation of customs documentation, container handling and storage of goods to be transported.
Mr Kassim said though the VAT is levied on companies based in Tanzania, the tax is finally transferred to owners of the transit goods who are later supposed to pay VAT in destination country on arrival.
EABC chairman, Mr Audace Ndayizeye, commended president John Pombe Joseph Magufuli as chair of the EAC summit for the remarkable progress towards the realisation of the regional integration process.
Mr Ndayizeye noted landmarks such as reduction of road blocks along the central corridor, reduction of work permit fees and signing of the East African Community Elimination of Non-Tariff Barriers to Trade Bill (2015), among others.
The Tanzanian vice chair EABC, Mr Felix Mosha, emphasised that affordable movement within the region can enrich the EAC integration.
He stated: “There is need for common understanding on air transport in terms of how to liberalise air transport and domesticating the EAC airspace”, citing that regional air tickets cost are significantly higher than international ones.
EABC delegates also brought to the attention of the chief secretary other issues which need to be worked on in order to improve doing business and advance the integration agenda such as the liberalisation of the service sector, harmonisastion of taxes and freer movement of workers.
In response, Mr Kijazi urged EABC to learn and share best practices from other regional economic communities so as to deepen EAC.
Area served. Dar es Salaam Port is the Tanzania principal port with a rated capacity of 4.1 million - down weight tonnage (dwt) dry cargo and 6.0 million - (dwt) bulk liquid cargo. The port serves the landlocked countries of Malawi, Zambia, DR Congo, Burundi, Rwanda and Uganda.
From Monitor Publications