Increased VAT Decreases Cargo Volume At Dar Es Salaam Port

Dar es Salaam – Lately the cargo volume passing through Dar es Salaam has been reduced and the Value Added Tax on transit goods are blamed and not the fear of making decision by port management or red tape.

According to Hebel Mhanga, the Acting Port Manager, the VAT on transit goods comes as a fear to importers considering it would increase port charges although the new policy has not yet been enforced.

Mhanga added the importers is fearing increased charges may inflate the costs of doing business.

Meanwhile, a Kenyan newspaper too carried a report confirming the business community are lately ditching the Dar es Salaam port due to delays by port management in making decision and also due to excessive bureaucracy.

The paper reveals increased transit volumes has been seen in Mombasa port.

Mhanga added the decrease in volume is a serious problem as copper exports from Zambia may decline too due to the yet-to-be-applied VAT on transit goods.

He said, “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.”

Data reveals there has been decline by 50 percent from Zambia and it is said to further decrease.

To rescue the situation Mhanga has submitted a proposal to the Revenue Authority of the country to scrap the increased VAT.

Johnson Minja, Chairman of the Tanzania Business Community, confirmed importers are now considering the rival ports as tax regime has lately become unpredictable at the Dar es Salaam port.

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