News Column

E. Africa Agrees On New External Tariff

June 16, 2014

Abdulwakil Saiboko

EAST African countries have agreed to effect changes in the Common External Tariff (CET) and amend the EAC Customs Management Act, 2004 for the financial year 2014/15.

The Minister for Finance, Ms Saada Mkuya Salum, told reporters here that the agreement was reached in pre-budget consultations of the ministers responsible for Finance from the EAC partner states, which was held in Nairobi early last month.

She pointed out those changes in CET, which were recommended and agreed imposing a duty rate of 10 per cent instead of 25 per cent on buses for transportation of more than 25 persons for the period of one year. "This measure is intended to improve passenger transportation services and reduce accidents," she said.

The minister said that it was also agreed to extend stay of the application of CET rate of 35 per cent on wheat grain and apply CET rate of 10 per cent for the period of one year.

She noted that the move aimed at providing relief to producers of products, which use wheat grain as an input and ensure price stability for such products.

Member states also agreed to continue granting duty remission to soap manufacturers using LABSA as raw materials from 10 per cent to 0 per cent for the period of one year in a move aimed at encouraging growth, production and employment in small and medium scale industries producing soaps in the country.

The minister noted that member states also agreed to increase duty rate from 10 per cent to 25 per cent on chemical based (petroleum) aerosol spray with the aim of applying a uniform import duty rate of 25 per cent on all chemical based and pyrethrum based aerosol sprays.

She added that the measure is expected to promote local production of pyrethrum and encourage investment in the pyrethrum based aerosol production.

Ms Salum noted that it was also agreed to reduce duty rate on papers from 25 per cent to 10 per cent in a move aimed at providing relief to industries that produce paper products taking into account the fact that such type of papers are not produced in the EAC region.

"A duty rate of 25 per cent will be maintained for papers ... ... .which are being produced by Southern Paper Mills Ltd in Tanzania hence the need to protect the industry," she said.

The minister noted that amendments to be made in the EAC Customs Management Act, 2004 will require Tanzania to grant import duty exemption on Electronic Fiscal Device (EFD) for a period of one year in a move aimed at increasing affordability.

She noted that the 5th schedule of the Act will be amended to remove exemption of import duty granted on splints used in the manufacturing of matches with the objective of promoting the use of locally available raw materials in producing splints.

The amendment will also provide import duty exemption on inputs used for manufacturing of gas cylinders with an intention to promote their production in the EAC region.

She noted that exemption of import duty to armed forces canteen organization will continue for one year and that during the period in question Tanzania has been asked to look into alternatives especially budgetary measure to provide relief on living cost of Army personnel.

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Source: AllAfrica

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