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'Bunge committee censured for suggesting EAC ‘mutiny’

Mashak | 10:49:00 | 0 comments

Moreover, the single customs territory alone can’t be blamed for rapidly declining transit cargo figures currently being experienced at the port of Dar es Salaam, some stakeholders argue.
They say a more valid reason for the cargo traffic drop at the country’s main sea-port is the government’s 18 per cent Value Added Tax (VAT) imposed on transit goods; a tax that does not apply to the rival ports of Mombasa in Kenya or Beira in Mozambique.
The proposal for Tanzania to remove itself from the EAC single customs territory (SCT) was made by members of the parliamentary watchdog committee when meeting with officials from the Ministry of Works, Transport and Communication in Dodoma on Monday.
”We have already lost a lot of cargo at the port as a result of implementing the single customs territory…in fact, we have been reduced to a mere tax collection agent for other countries,” committee vice-chairman Selemani Kakoso asserted during the meeting.
But among those who strongly faulted the committee for coming up with such a proposal when contacted by The Guardian yesterday - saying it was tantamount to abandoning the EAC as a whole - were prominent opposition member of parliament Zitto Kabwe and former EAC secretary general Juma Mwapachu.
According to Zitto, the Kigoma Urban MP from the ACT-Wazalendo party, the foundation of the envisaged wider EAC Customs Union requires a single customs territory in place which Tanzania cant get out of unless it quits the regional bloc altogether.
“What the parliamentary committee is proposing is tantamount to exiting the EAC as a whole. Let them say that they want ExiTan or TanExit, rather than picking on a single issue,” he said.
He called on government authorities to address the “fundamental reasons for low cargo at the Dar port…listen to transporters and reduce taxes.”
Ex-EAC secretary general Mwapachu said he felt saddened by the committee’s proposal and described it as being “erroneous, misinformed and dangerous.”
“It lacks logic and evidence because the purpose of the single customs territory now being executed in the two EAC countries with sea ports - Tanzania and Kenya - is to allow imports destined to landlocked EAC countries to move freely, and not as transit cargo as was previously the case,” Mwapachu said.
He explained that once the revenue authorities in the two countries have collected due customs duty based on the EAC-endorsed Common External Tariff, the imports en route to final destination cannot be hijacked and dumped in the originating EAC country because taxes would have already been collected.
“I can understand the Democratic Republic of Congo (DRC) doing so but not Rwanda or Burundi…besides, these countries acceded to the EAC single customs territory long before Tanzania did,” Mwapachu added.
Tanzania Freight Forwarders Association (TFFA) vice-president Edward Urio said there are only two reasons why cargo traffic has dropped at the port of Dar es Salaam, the first being the 18 per cent VAT charges imposed on transit goods, and the second being the existence of another single customs territory between Tanzania and the DRC.
“The government must work on the key matters that have led to the drop of cargo at the Dar port … it must sit down with key stakeholders so that they can be informed of what is really happening,” said Urio.