19 July 2013

Tanzania: Prices Up After Excise Duty Hike

PRICES of various imported goods have drastically gone up following the government decision to increase excise duty.

Survey by the 'Daily News' in Dar es Salaam revealed that traders increased prices of imported goods after application of new rates of excise duty since July 1.

Mr Iman Seif, a trader at Kariakoo explained that a 20ft container of clothes was charged 15m/- in January, this year, but the charges have doubled to 30m/- in excise duty. He explained further that apart from such excise duty, imported goods are subjected to other charges imposed by Tanzania Bureau of Standards (TBS) and Fair Competition Commission.

Mr Seif noted that bureaucracy in clearance of goods by the Tanzania Revenue Authority (TRA), Tanzania Bureau of Standards (TBS) and other authorities also push up costs of imported goods.

Another trader identified as Mr Joseph Mwangi, said despite concern expressed on new rates of excise duty, he claimed that demurrage charges was another cause of higher prices of imported goods.According to Mr Mwangwi, any good is charged demurrage cost of 0.3 US Dollar for every one cubic metre for staying at the port after 14 days.

Mr Amri Sakaya, a trader at Kariakoo said that following such increase, some of his customers from the Democratic Republic of Congo (DRC), Zambia, Malawi and Rwanda were no longer coming to take goods. "The situation is worse, if TRA is not taking remedial measures, more traders will close shops," he stressed.

Mr Sakaya added that they (traders) were ready and dutybound to pay taxes, but they were contesting such drastic increase of taxes which had made their goods unaffordable. Tabata resident, Nicholaus Mpini wondered as to why TRA had been torturing traders for imposing unfair tax rates, instead of creating conducive environment of making traders conduct their businesses smoothly and hence become tax compliant.

However, when contacted the TRA Director of Taxpayer's Education, Mr Richard Kayombo told the 'Daily News' yesterday that TRA had no mandate of raising excise duty and that Parliament is the only organ vested with such powers. Mr Kayombo explained that good numbers of those who are saying the excise duty has risen are deceivers and they were having behaviour of importing different goods illegally.

They're not giving correct information on their imported goods, they can say there are mosquito nets in a container while there are Khanga, others declare computers in a container while there are television sets just to evade taxes. But we've now cornered them," he added.

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