Stand-off over bus import tax ends

By James Kandoya

Minister of Finance, Saada Mkuya

The government has resolved the tax levy dispute between bus owners and the government on more than 44 upcountry buses imported from China which are stranded at the Dar es Salaam Port.

 

The development follows talks between the Prime Minister’s Office, the Finance Ministry and the Tanzania Bus Owners Association (TABOA held yesterday in Dar es Salaam.

 

The import tax will  now be cleared next week. The bus tax import talks hit snag last month and sought intervention by the Vice-President’s Office. 

 

When contacted the Minister of Finance, Sada Mkuya said the government had allowed bus owners to clear all stranded bus under condition that they must pay first 10 per cent tax levy as initial down payment.

 

She said the decision was agreed between the Bus owners representative, Vice President Office’s and the Ministry of Finance.

The minister said in their agreement, the bus owners must clear the remaining 5 per cent on installments until December this year.

Mkuya insisted that December should be the deadline of all imports payments accrued.

 

“All bus owners must have cleared all their 5 per cent levy installments by the end of December,this year and not otherwise, “she said.

 

The matter surrounded a 25 per cent import tariff imposed on bus imports which the Tanzania Bus Owners Association (TABOA) wanted to be revised to 10 per cent and failure to which, they had threatened  to hold a nationwide bus strike.

 

In a telephone interview with The Guardian yesterday, Taboa Secretary General, Ernea Mrutu said that talks over the matter were fruitful to great extent and they expected that the stranded buses will be cleared next week.

 

He however did not disclose whether the buses will be released by using the previous 10 per cent as they  had demanded.

 

“Thanks to the Premier for his quick response to our request submitted in his office few months ago. I call on bus owners to be calm when other processes are underway,” he said.

 

He however said that more details on the discussions will  be made public soon.    

 

Earlier Taboa Secretary General Enea Mrutu told The Guardian that they were seeking intervention by the Vice President’s Office to help resolve the matter because; “we failed to reach a consensus with the Finance ministry...they are intent on not reversing the tariff.”

 

“If the government will not reduce the import tariff to 10 per cent we will organise a strike because  bus  owners have failed to clear their buses at the port due to the high import tariffs,” he warned.

 

“The letter from the Ministry of Finance has disappointed us (bus owners) and other stakeholders since it didn’t work on our request,” he said.

 

“To put more emphasis, we shall send another letter to the Vice President’s office seeking its intervention over the matter,” he added.

 

He said in case there is no ‘acceptable’ resolution from the VP’s office, then, Taboa will call for a countrywide strike.

“The strike will be indefinite until the government resolves the problem,” he said.

 

“It is time for the government to give more attention to its local investment and investors who have shown interest to invest in their own country’s development,” he said.

 

“I call on the government to work on the matter immediately to avoid more demurrage charges that might have worse impact on the final service user in form of high fares for passengers,” he cautioned.

 

He warned that if the 25 per cent is maintained, then bus owners will have to charge upcountry fares at a range between 45,000sh/ to 50,000sh/- to keep their businesses afloat.

 

Mrutu also cited the falling value of the shilling against the dollar to further increase the cost of operation for improters.

 

In the still developing tax tug of war, only in July the Tanzania Bus Owners Association (Taboa) put on hold its planned nationwide strike pending negotiations between its task force, prime minister’s office and the ministry of Finance.

 

Taboa had threatened to suspend services if the government did not reduce the import duty on buses however, speaking to The Guardian, Taboa’s secretary general, Enea Mrutu said they decided to put the strike on hold as discussions were still ongoing.

 

“We are not going to accept such unfriendly duty as the majority of bus owners have already made consignment payments,” he stressed.

Reached for comments, Minister Saada Salum Mkuya said the levy was instituted as a result of the duty agreement inked by all East African Community (EAC) member states.

 

 “If they are to go on strike let them do so,’ she said.

“I understand that the strike will have negative economic effects but since they are also countrymen, they should find a way of accommodating the tariffs,” she said.

 

 Mkuya explained that last year, when the government reduced the import tax to 10 per cent, the move was only temporary and meant to facilitate importation of buses for the prioritised Dar es Salaam Rapid Transport (DART).

 

‘The request was granted by member states and Tanzania was guaranteed a twelve-month period to import the vehicles,” she detailed and reminded all stakeholders that; “the leeway period ended on June 31.”

 

“This means that the tax holiday came to an end effectively July 1, this year,” she said and maintained that the imposed duty fee is meant to improve the country’s tax collection and facilitate financing of national development projects.