MPs warn govt over EAC single customs territory

Kurzweil · 2016-09-01T13:50:39+00:00

Saying it is one of the major causes of massive revenue and job losses and a decline in lucrative transit cargo traffic at the port of Dar es Salaam. The Single Customs Territory (SCT), which was adopted in January 2014, was expected to increase the volume of goods handled by both Dar es Salaam and the port of Mombasa in Kenya. But on the contrary, Dar es Salaam has recorded a significant reduction in cargo volumes this year, according to stakeholders. While government officials blame the drop in cargo business at the Dar es Salaam port to an ongoing tax evasion crackdown and the well-documented problems of inefficiency at the port, the parliamentary committee yesterday chose to pinpoint the SCT as the real culprit. "The committee is of the opinion that Tanzania should pull out of the EAC single customs territory,” committee vice-chairman Selemani Kakoso said yesterday during a meeting with top officials of the Ministry of Works, Transport and Communication. “We have already lost a lot of cargo at the port of Dar es Salaam as a result of implementing the single customs territory. In fact, we have been reduced to a mere tax collection agent for other countries," Kakoso added. The adoption of the SCT by the five EAC member states - Tanzania, Uganda, Kenya, Rwanda and Burundi - was a key step towards the full attainment of a regional customs union through removing restrictive regulations and minimising internal border controls on goods moving between the partner states to ultimately allow the free circulation of goods. An interconnectivity of customs systems in the east African region was expected to, among other things, facilitate a seamless flow of information between customs stations and a payment system to manage transfers of revenues between partner states, according to the EAC website. Under the customs union, partner states agreed to adopt the 'Destination Model' of clearance of goods where assessment and collection of revenue is done at the first point of entry. Objectives of the customs union include reducing the cost of doing business and creating a mechanism for prevention of smuggling at a regional level. According to Kakoso, the Tanzania-Zambia Railways Authority (TAZARA) has reported a significant decline in cargo volumes at the Dar es Salaam port which are transported by (TAZARA) rail to the land-locked Democratic Republic of the Congo (DRC). Instead, most of the DRC cargo is now being diverted to the port of Beira in Mozambique, the committee vice-chair said. He asserted that DRC traders were running away from the Dar es Salaam port due to the implementation of the single customs territory which has made the Dar es Salaam port much more expensive. Mozambique, which is not part of the EAC and hence has not adopted the SCT, is benefitting from the fallout, Kakoso said. He added: "Most businessmen from DRC Congo have now stopped using the Dar es Salaam port and shifted their business to Beira port in Mozambique, while others are using Kenya’s Mombasa port.” "Although Kenya has also adopted the single customs territory, they are somehow getting more DRC cargo while we are losing out." Cargo volumes at the Dar es Salaam port are however likely to rebound if Tanzania exits from the single customs territory, he argued, saying: “We have to let other countries choose their ways of collecting their taxes. As you can see at our own port of Dar es Salaam, the drop in cargo volumes has impacted many businesses across the country, including transport firms whose trucks are now idling in their parking lots.” According to Kakoso, many workers in the local transport sector and clearing and forwarding companies could lose their jobs due to the declining cargo traffic situation at the country's main port. On his part, committee member Ahmed Shabiby (Gairo - CCM) described the decline in cargo volumes at the Dar es Salaam port as "massive." “We have seen DR Congo businessmen now opting to use the Mombasa port and they have stopped coming to the Dar es Salaam port. This has led to a reduction in cargo traffic at the Dar es Salaam port by 60 per cent," Shabiby said. "We have also seen some businesses in Tanzania becoming stuck due to the adoption of this single customs territory”, he added. Responding to the committee’s concerns, the deputy minister for Works, Transport and Communication, Edwin Ngonyani, defended the SCT by saying it has helped boost revenue collection by the Tanzania Revenue Authority (TRA). “What the government understands is that this is a good system and it has in fact increased tax collection in our country and reduced the dumping of cheap export goods into our market,” Ngonyani said. But he said the ministry was not responsible for the implementation of the SCT, asserting that the finance ministry and TRA were better placed to explain the advantages and disadvantages of the system. TAZARA's regional general manager for Tanzania, Fuad Abdallah, told committee members that the railway has been hit by a sharp fall in transit cargo volumes at the Dar es Salaam port. “We failed to reach our target of transporting 200,000 tonnes of cargo a year after losing a significant amount of transit cargo from the DRC," Abdallah said.

Thread starter Kurzweil
Start date Sep 1, 2016

Kurzweil

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MPs warn govt over EAC single customs territory

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