MANUFACTURERS under the Export Processing Zones Authority (EPZA) are allowed to sell up to 20 per cent of their produce locally provided they pay all applicable taxes.
Export Processing Zones Authority (EPZA) Director General, Dr Adelhelm Meru said in Dar es Salaam that complaints by some local manufacturers that EPZ factories are unfairly competing with them in the local market are unfounded.
Dr Meru noted that even if the EPZ manufacturers want to offload more than 20 per cent of their produce in the local market, it is acceptable provided all incentives applicable to exports are not applicable. "That allows EPZ companies to sell more than 20 per cent of their produce locally provided that all applicable incentives are waived to ensure fair competition," he noted.
Manufacturers in Tanga yesterday complained to the Minister for Industry and Trade, Dr Abdallah Kigoda that they are being strangled by EPZ manufacturers who are supplying the local market. "We can't compete with them fairly because they have a whole range of tax incentives which we don't have," said one of the representatives of manufacturers based in Tanga when Dr Kigoda inspected factories in the area.
"I will follow up on this and see what we can do to contain this unfair competition if it is true," Dr Kigoda promised. For the past five years, EPZ investors have invested 710 million (approx. 266.73bn/-) and generated 15,100 direct employment and over 70,000 indirect employment.
Among other incentives, EPZ investors enjoy a 10 year corporate tax holiday and capital goods which many local industries are not entitled to. EPZ manufacturers also do not pay local authority taxes for goods and services produced while withholding tax on rent, dividends and interest for ten years. Targeting the export market, EPZ manufacturers also enjoy cheap labour as trade union movements and the country's labour laws pertaining to remuneration and working conditions don't apply.
The country has six EPZ which have been set up since 2002 when the EPZ Act was enacted by parliament. These include Benjamin Mkapa Special Economic Zone, Hifadhi EPZ, Millennium Business Park, Kisongo EPZ, Kamal Industries and Global Industrial Park.