The Acting Port Manager, Hebel Mhanga, commented that although it was yet to be enforced, the VAT on transit was scaring away importers as they fear it would increase port charges hence inflating their costs of doing business. He said the situation was serious as the problem of copper exports and transit vehicle volume from Zambia may decline due to VAT threat. Moreover, there were likelihood that copper cargo from Zambia may decline as most of agreements with importers were coming to an end in the near future.
“The problem is most of the big importers may not renew their contracts because of the VAT threat. So there is a possibility that copper cargo will decline,” he said. So far, transit vehicle for Zambia had declined by 50 per cent and it is likely there would be further decline, he said.
Mr Mhanga together with other officials are currently lobbying the government to scrap off the tax. A proposal to the Tanzania Revenue Authority has already been tabled
Earlier, the Chairman of the Tanzania Business Community, Johnson Minja, said it was true that many importers were opting for rival port as tax regime at the Dar es Salaam port were becoming “unpredictable.” Ad hoc tax payments rendered importers helpless and leading to a pile up of cargo at the port due to their inability to clear it.
He said they have organised a meeting with TRA Commissioner General to address the situation as it is affecting both the traders and the port.