Kenya warns Tanzania in sweets tax row
A trader arranges sweets at a factory in industrial area, Nairobi. For
the fourth consecutive month, confectionery, juice, ice cream and
chewing gum from Kenya could not get preferential access to the
Tanzanian market. FILE PHOTO | PHOEBE OKALL
Kenya has warned it will block the entry of Tanzanian goods into
the country after Dar es Salaam’s refusal to allow duty-free entry of
Kenyan-made confectionery, juice, ice cream and chewing gum.
Tanzanian
authorities have been given up to the end of the month to visit the
Kenyan firms to find out if imported industrial sugar is being used in
the products at the centre of the trade spat which remains unresolved
since March.
Dar slapped a 25 per cent import duty on
Kenyan firms in confectionery business, citing use of imported
zero-rated industrial sugar in the goods.
“Tanzania
Verification Mission to visit Kenya on use of duty free sugar imports on
confectioneries to be completed in two weeks (May 31, 2018).
"Failure to adhere will result in implementation of retaliatory measures,” said the report of a presidential roundtable.
“All manufacturers (have been) requested to comply and co-operate with the Tanzania Verification Mission.”
Tanzania rejected certificates of origin issued by the Kenya
Revenue Authority (KRA) and opted to levy 25 per cent import duty on
Kenyan confectioneries.
Acceptance of the certificate —
a document showing where a product has originated from and is used to
determine duty for imported goods — guaranteed the entry of Kenyan goods
tax-free passage to Uganda and Tanzania.
The East
Africa Community common market made up of Tanzania, Kenya, Uganda,
Rwanda and Burundi allows free movement of locally manufactured goods
within the bloc.
Tanzania and Uganda revenue bodies
have however accused Kenyan manufacturers of tilting competition in
their favour by using industrial sugar imported under a 10 per cent duty
remission scheme.
The region does not produce
industrial sugar. But Kenyan firms have accused the two countries of
using the customs taxes to restrict trade in East Africa.
KRA's intervention
The
Kenya Association of Manufacturers (KAM) said late last month while
Uganda had softened her hardline stance, the Tanzania Revenue Authority
(TRA) had rejected evidence from the Kenyan Treasury showing the 14
companies that had benefitted from the window.
“The
denial of entry for Kenyan goods into Tanzania continues despite KRA’s
intervention to clarify the matter to its Tanzanian counterpart,” the
manufacturers’ lobby said on April 26
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