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[TD="class: contentheading"]Investors to pay more to employ foreign workers [/TD]
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[TD="class: createdate"]Saturday, 09 July 2011 11:30 [/TD]
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By Bernard Lugongo
The Citizen Reporter
Dar es Salaam.
The government has raised work and residence permit fees for foreign workers.
According to a Government Gazette notice published on July 1, the fees have gone up by between 25 and 300 per cent.
Also increased are charges for student visas, special permits and citizenship. This means that sectors such as tourism are likely to feel the pinch of the increases.
Some of the charges, such as those for class ‘B' residence permits issued to foreign employers in industries, private and public companies as well as mining firms, have more than doubled.
Yesterday, however, some members of the business community and investors, who are already incurring huge losses due to a serious power shortage, said the decision was "unfortunate and unwarranted."
"This is a disincentive to investment particularly at this time when competition for investment is intensifying in the East and Central African region," said Mr Cornelius Kariwa, who is the chairman of the Association of Tanzania Employers (ATE).
He said the increase was against the stated mission by the same government to lure more investors to the country. "If we impose high fees for residence permits why should foreign investors opt to come here instead of, say, Rwanda which charges nothing?" he asked.
Home Affairs minister Shamsi Vuai Nahodha could not be reached for comment yesterday, but sources in the Immigration Department said the decision was aimed at increasing government revenue and discourage the hiring of foreigners for jobs that could be done by Tanzanians.
Industry and Trade minister Cyril Chami told The Citizen on Saturday by telephone that the increase would also benefit foreign investors through improvement of infrastructure and business environment. "I don't think the added costs will disadvantage investors because Tanzania is still a preferred investment destination in this part of Africa," Dr Chami said, adding that the government did not complain when investors increased the cost of their products and services.
However, the CEO Roundtable of Tanzania vice chairman, Mr Yogesh Manek, said their concern was the signal that such a message would send to prospective investors.
He said it was unfortunate that the new permit fees have come into effect when the country is suffering from a prolonged power crisis. "It may not have the severest of impacts, but it is worrisome at this time when the cost of doing business is going up."
Mr Manek warned that the country could not continue jeopardising its competitiveness and efficiency in the face of tough regional competition. He added that Tanzania needs to maintain high investment inflows if it is to maintain its impressive economic growth.
Meanwhile, Mr Kariwa said it was not for nothing that Rwanda was earning worldwide accolades for positive and effective reforms that had spurred industrialisation.
Work permits have been a thorny issue among East African Community members, who have agreed on the Common Market Protocol that, among other things, envisages the free movement of labour and services.
Rwanda and Kenya are the only EAC countries that have scrapped work permits for workers from other members of the bloc. Rwanda also offers free citizenship on application for investors who have stayed in the country for more than five years.
The full impact of the Common Market has not been felt as member countries are yet to enact laws to enforce the provisions that include free movement of goods that have until now enjoyed reprieve through the EAC customs union. Other competing countries such as Malaysia also offer no permit restrictions and also grant free citizenship for those meeting a set threshold in foreign direct investment (FDI).
The new class ‘A' permits for big companies, industries, fisheries, mining and transport have gone up from $1,600 (Sh2.6 million) to $2,000 (Sh3.2 million).
Class ‘B' permits for expatriates has jumped from $600 (Sh960,000) to $1,500 (Sh2.4 million). Fees for class ‘C' permits for missionaries, researchers and students are up to $500 (Sh800,000) from $120 (Sh192,000).
Other new fees included dependant's pass ($500), special pass ($600), visitors pass ($200) and re-entry pass ($50). Fees for multiple entry visa is currently $100 (Sh160,000) while a single entry visa is charged at $50 (Sh80,000).
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