Tanzania slaps 25 per cent tariff on Ugandan goods

Several Ugandan companies involved in manufacturing and exports of finished products are crying foul after Tanzania recently imposed a 25 per cent tariff on manufactured goods entering its borders.The new measures that were announced in early December 2011 have forced Ugandan manufacturers exporting into Tanzania to pay a 25 per cent Common External Tariff (CET).

Uganda won concessions from her East African partners in the regional integration process to continue exempting its manufacturers from paying import duty on a list of 135 industrial inputs when the cet initially came into force in 2005. Like the duty remission scheme, the list was supposed to lapse at the end of last year but was extended after sustained pressure from the countries’ industrialists.

“Uganda got an extension of the exemption to the end of June 2012. During this period the status quo is likely to remain so that manufacturers in Tanzania and other partners are not disadvantaged,” said a Tanzanian Revenue Authority (TRA) official.At the time of the negotiations, Uganda had the lowest applied tariff rates in the region standing at 0 per cent, 7 per cent and 15 per cent for raw materials, intermediate products and finished, manufactured products respectively.

But the new measure has left goods destined for Tanzania grounded at Port Bell in Luzira, Kampala. The Mukwano Group of Companies, which exports tonnes of detergent, laundry soap, petroleum jelly, edible cooking oil and plastics monthly, has been hit most.

Some ontainers that were destined for Tanzanian ports of Bukoba and Mwanza on Lake Victoria were offloaded from the ship at Port Bell due to the exorbitant new tariff.“We had loaded finished goods worth hundreds of thousands of US dollars but had to offload them and return them back to our warehouses.

This is a great loss to us and Uganda and this move is counterproductive to the spirit of East African integration,” said B. W. Rwabwogo, General Manager – Operations, Mukwano Group of Companies, Uganda.Britania Allied Industries General Manager marketing SK. Sridharan described the new move as an impediment to trade in the EAC region.

The Citizen