Stakeholders from Tanzania have expressed concern and wary of losing employment and business opportunities under a more integrated East Africa Community (EAC) Customs Union and Common Market protocols.
That’s the the most vivid reading here, at least as unveiled in a report presented to the East African Legislative Assembly (EALA), citing several factors such as lack of enough knowledge on the laws and regulations guiding operations of the EAC integration, but also harmonisation of taxation systems within, and among, partner states.
Presenting the report to the House, Ms Patricia Hajabakiga said EALA Tanzania Chapter members who toured Dodoma, Morogoro and Zanzibar for sensitisation activities between April and May this year, received critical issues and concerns that need working upon – with immediate effect.
The Chapter, under chairmanship of Mr Charles Makongoro Nyerere, Mr Twaha Taslima, Dr Nderakindo Kessy, Mr Abdulah Mwinyi, Mr Adam Kimbisa, Ms Shy-Rose Bhanji, Ms Maryam Ussi Yahya, Mr Bernard Murunya and Ms Angela Kizigha, visited, interacted and held discussions with different stakeholders.
Among others, they met with key officials at the Tanzania Chambers of Commerce, Industries and Agriculture (TCCIA), students and staff of the Institute of Planning in Dodoma as well as other stakeholders in Dodoma.
At TCCIA, the stakeholders pointed out that, without harmonisation of some taxes among partner states, the EAC Customs Union could not operate smoothly.
“It was pointed out that EAC partner states still operated different domestic tax rates and structures … especially excise duty and Value Added Tax (VAT). These differences have resulted in market distortions leading to such problems as smuggling and other industry malpractices that have witnessed a rise in some ‘artificial’ exports.
The most affected commodities are edible oils, maize flour, cigarettes and liquor,” said Ms Hajabakiga.
She said there was also generalized, if unfounded, fear that businesses were “likely to collapse” due to the inability of the Government and its High Commission in Nairobi to facilitate and empower them to compete particularly with their relatively stronger, and more aggressive Kenyan counterparts. Examples were cited of how traders had been losing out —to their Kenyan counterparts — on business deals on maize, grapes and timber.
The Chapter cited apparent lack of sufficient knowledge among the stakeholders on issues such as Certificate of Origin, which is one of the most important documents to facilitate cross-border trade within East Africa; also lacking is information on the Programme for Elimination of Internal Tariffs (EIT) including the categorization of taxable and non-taxable goods.
The applicable rates for dutiable goods are generally known by traders who felt that they are at the mercy of customs and municipal councils’ officials.
The August House heard concerns over customs-related challenges, such as the unavailability of a list of common goods and Certificate of Origin on the Tanzania side.. Concerns were also expressed on barriers to ‘transiting’ goods from Tanzania — through Kenya and Rwanda – where the Tanzanian traders were allegedly being subjected to multiple fees.
At the Institute of Planning, Ms Hajabakiga said, there were fears of losing out in employment opportunities due to differences in the competitiveness of the labour markets, with some participants expressing concerns that movement of labour would lead to an “influx” of qualified people’ from other partner states into Tanzania, thus squeezing out the Tanzanians.
“Though land is neither a Treaty matter nor among 17 areas of cooperation, concerns were raised about differences in the land tenure systems of partner states and loss of land due to free movement of and right of establishment within the EAC partner states.
“The fear of loss of land was raised based on the varied population densities of the EAC partner states,” she said, adding that sensitization and awareness on the EAC integration process should be a continuous activity.