The Tanzanian authorities are demanding for full Common External Tariff (CET) duties of 25 percent on Kenya originating products instead of the free access granted to products that meet the EAC origin criteria.
The affected products include confectionary, Cerelac, juice, ice cream and chewing gum.
Tanzania cites EAC Legal Notice number EAC/70/2017- where Kenya was granted duty remission on raw sugar of HS Code 1701.14.90, at a duty rate of 0 percent for one year to manufacture sugar for industrial use – as justification for its actions.
“However, these actions would only be permissible if the product being exported to Tanzania is industrial sugar made from the raw sugar under remission. This is not the case,” the association said in a statement issued in Nairobi.
The latest trade restriction comes amidst high-level talks between Kenyan and Tanzanian authorities to remove tariff and the non-tariff barrier which has seen Tanzania impound and block goods from Kenya.
“The exports into Tanzania are manufactured using industrial sugar imported under the EAC wide duty remission, attracting 10 percent duty. This scheme applies to all EAC partner states including Tanzania,” added the statement.
The denial of entry for Kenyan goods into Tanzania continues despite Kenya Revenue Authority’s (KRA) intervention to clarify the matter to its Tanzanian counterpart.
The association further said that KRA has provided detailed information with evidence that manufacturers of the affected products, import industrial sugar as well as providing sample paid entries that demonstrate that companies producing these goods have been subjected to the 10 percent duty as they fall under EAC duty remission scheme.
“Despite these and other multiple attempts, Tanzania has continued to bar Kenyan products and has additionally denied the delivery of these goods under bond. The lack of refusal to allow entry of our products into Tanzania has impacted business negatively,” KAM pointed out.
Tanzania is Kenya’s second most important market in the East African region. Kenya’s exports grew from 16.9 billion shillings ($169 million) in 2004 to 42.7 billion shillings($419 million) in 2014 before declining to 33.7 billion shillings($330 million) in 2015; while imports from Tanzania grew from 2.1 billion shillings($19.9 million) to 18.4 billion shillings($179 million) in 2014 and only marginally declining to 16.9 billion shillings($169 million) in 2015.
Kenya is also the second leading African investor in Tanzania, with total investment outlay of $1.54 billion, in over 455 projects and employing over 50, 000 people.
By APA News
The Express News