Dar es Salaam — Tanzania’s economy has been growing at a satisfactory rate but the country must promote several areas for the growth to have an impact on poverty reduction endeavours amid global uncertainties, the United Nations has said.

In its Development Assistance Plan 2016 -2021 Report – which was launched in Dar es Salaam recently – the United Nations calls upon Tanzania to ensure that it puts emphasis on growth of areas that will have a a quick impact on the population.

The areas include tourism, agriculture and in building productivity of the micro, small and medium enterprises.

“The country must provide openings for upgrading the tourist sector and branding the country as destination of choice with focus on promoting natural beauty, historical and cultural heritage of Tanzania mainland and Zanzibar,” reads a statement in the report.

Tanzania, the UN says, must take advantage of the high rates of return on investment in social sectors by addressing challenges of equity, quality and scale. That can be done by investing in building productivity of the micro, small and medium enterprises (MSMEs).

The MSMEs must be helped through increased access to finance, business development services and training.

“Similarly, the country must invest in productivity to provide measures for agriculture and development of agro-industries which have enormous potential given that 80 per cent of agricultural exports were currently not being processed in the country,” the report reads.

Most of the coffee beens come to the world market from African countries like Ivory Coast, but few companies roast and package them locally.

However, things started to change slowly and some of the Robusta variety is now being processed for local consumption.

“International brands are coming to Ivory Coast. They have understood and realised the potential of this market because we are having a dynamic boom in our economy which attracts a lot of people,” says Fabieenne Dervain of Couleur Cafe Abidjan.

Dervain is selling quality Ivorian coffee processed in Abidjan to wealthy Ivorians. She believes that if it is prepared and blended correctly, it is far superior to any other variety of coffee. It is also more affordable.

Bakayako Lamine, an Ivorian coffee brewer, says: “[Ours is] a type of coffee that is a bit bitter and coarse and yet so flavourful. It’s good.”

Famous coffee brands are also increasingly mixing Ivorian coffee with the more expensive and harder to find Arabica variety.

Arabica is considered to be smoother with complex flavours, but it is a more fragile plant. Robusta makes up about 30 percent of global coffee production.

The government mulls coming up with a new law and regulations that will compel privatised firms to enlist at the Dar es Salaam Stock Exchange (DSE) if they fail to do so voluntarily.

The move aims at encouraging transparency and good corporate governance; hence making tax administration task easier while enabling citizens to participate in economic activities. For instance, some of the listed companies feature in the 15 largest taxpayers and quality employment provision list; namely TBL, TCC, NMB, CRDB Bank, Simba Cement, Twiga Cement and TOL Gases.

The Minister for Finance and Planning, Dr Philip Mpango, said the same mechanism (mutual talks) used to list seven privatised firms at the DSE would be applied to other firms that had not been listed. “If the mutual talks fail, then the government will push them to offload some of their shares at the DSE,” Dr Mpango said during the official self-listing of DSE shares at the bourse.

He noted that although the government had stakes in some of the privatised companies, it will offload them strategically to avoid harming their operations. “We do not only want Tanzanians to buy shares in those companies and boost their welfare but we also need to openly see the companies’ operations and proper determination of (our) taxes,” Dr Mpango said.

Earlier, DSE Chief Executive Officer (CEO) Mr Moremi Marwa said more than 400 state-owned enterprises (SOEs) had been privatised in the last two decade out of which only seven made their way through the capital market.

“We only wish if at least 10 per cent of the privatised companies were privatised through the exchange — we would have over 50 companies. The impact (of listing 50 firms) to our capital market and economy would have been significant,” Mr Marwa argued.

The CEO stated that learning through previous experience, “it is advisable that future privatisations are conducted through the capital market.” Capital Markets and Securities Authority (CMSA) CEO Ms Nasama Massinda said they were very pleased by the government’s move to require the telecoms sector to offload 25 per cent of their share by listing at DSE.

DSE yesterday self-listed after a successful initial public offer that saw it was oversubscribed by 377 per cent. The shares rally in the first day from 500/- at IPO to 800/- in just 20 minutes of listing. It is believed that the more attractive DSE becomes, the more enterprises and investors would come up to use the local capital market to support the industrialisation drive.

The new 18 per cent Value Added Tax (VAT) on tourism services would not harm the growth of the sector as it was carefully researched before it was introduced, a government minister has said.

The Minister for Agriculture, Livestock and Fisheries, Dr Charles Tizeba, said in Dar es Salaam yesterday that key stakeholders in the sector were consulted before the new tax was introduced and were satisfied that it would not cripple the sector which is leading in foreign exchange earnings in Tanzania.
Speaking during the inauguration of the Swissport cargo terminal, the minister appealed to members of public people to stop giving misleading information concerning the new tax measure because it may send wrong message to tourism stakeholders.
“The government is aware of the competitive environment among the East African Community member states and the country’s weaknesses and strengths in the sector, thus this matter should not be used to mislead people because it may send wrong signal to the stakeholders,” said Dr Tizeba, who was representing Minister for Works, Transport and Communication.
Mr Tizeba further explained that Tanzania’s tourism was different from other countries such as South Africa, Zimbabwe and Kenya noting that “while Kenya is leading in number of tourists visiting the country, Tanzania earnings from the sector were high compared to Kenya. He observed that, before the Finance Act was endorsed by Members of Parliament, key players were involved in every aspect as in budget preparation passed through various stages.
Expounding, Mr Tizeba said that the introduction of 18 per cent VAT on tourism was carefully researched and highly debated in the Parliament before being endorsed thus allaying fear expressed by some stakeholders that it would lower the number of tourists and negatively impact on aviation industry. In his remarks, Swissport Tanzania Plc Chief Executive Officer Mr Gaudence Temu informed the Minister that the industry key players were of the views that the newly introduced VAT on tourism services was likely to have negative impact on both tourism and aviation sector.

“This is because the tax is an additional cost given that it was not factored in tour packages some of which had already been sold one year ago,” Mr Temu said. He added that the tax was also going to erode the country’s competitiveness against its neighbours who have scrapped VAT on tourism services.

Describing the state-of- the-art Air-cargo import warehouse, he said it is one of its kind in Africa with fully secured environment, access control through turnstiles and biometric locks. The cargo facility has locations provided for handling special cargo such as room for live animals 17sqm, Morgue capable to store up to 4 bodies, vulnerable items storage room 64sqm, valuable storage room of 40sqm, radioactive room 12sqm and dangerous goods room of 65sqm among others.
Mr Temu however noted that by having the cargo import terminal Swissport will have now met the International Civil Aviation Organisation (ICAO) requirement for segregation of import and export cargo.

Arusha — East African businesses will tomorrow engage key agencies to facilitate trade in Tanzania.

“The meeting aims at providing solutions to enhance business environment in Tanzania, hence increase intra-EAC trade,” said the East African Business Council (EABC) chief executive officer, Ms Lilian Awinja, said.

EABC, the East African Community Secretariat, Trademark East Africa and the Tanzania Private Sector Foundation will host a public-private dialogue (PPD) with key trade facilitation agencies.
The forum will bring together stakeholders from public and the private sectors to discuss major developments as well as address key challenges facing entrepreneurs across the EAC in conducting trade in Tanzania.
Businesses will seeking an understanding of new developments with regard to the work of trade facilitation agencies and clarifications on issues affecting their businesses.

Specifically, the key objectives of the forum is to provide an opportunity to TBS officials to interact with the EAC business community on various requirements regarding compliance with standards in Tanzania. It will also offer an opportunity for TRA officials to discuss with business executives on various tax requirements and compliance, particularly those that are applied to goods from EAC.

The talks will also be a good platform for TPA to interact with the businesses on new developments at the Dar es Salaam Port and the progress towards making it a more efficient port in service to East Africans. TFDA officials are expected to clarify matters regarding the compliance with technical regulations for entry of food, drugs, cosmetics and other products into Tanzania.
Tanzania has been rated lowly in reports on ease of doing business.

The World Bank Ease of Doing Business Report for 2015 placed the country at No. 131 out of 189 countries. It revealed that Tanzania sank by one position compared with how it fared a year before.

The score areas and positions that put Tanzania at rank 131 out of 189 countries in 2015 included starting a business (124), dealing with construction permits (169), getting electricity (87), registering property (123), getting credit (151), protecting minority investors (141), paying taxes (148), trading across borders (137), enforcing contracts (45) and resolving insolvency (105).

According to the report, it takes about 26 days to start and run a business in Tanzania, which is a slight improvement compared with the average of 27.9 days in the sub-Saharan Africa.

Rwanda’s doing business 2015 rank was 46, up from position 48 in 2014. It took 6.5 days to start and run a business. Kenya’s doing business 2015 rank was 136 up from 137 in 2014.

Morogoro — Customers will not be charged extra money

Banks will have to deduct 18pc from fees

Weeks of confusion over 18 per cent Value Added Tax (VAT) on bank transactions yesterday came to an end after Finance and Planning Minister Dr Philip Mpango clarified that the amount will be levied from the transaction fee that banks impose on customers.

Therefore, according to the minister, customers will not be charged extra money and instead banks will have to deduct 18 per cent from the fee to cover VAT. Dr Mpango was speaking after opening a capacity building workshop for internal auditors organised by the Japan International Cooperation Agency (JICA) as part of the corporation’s funded Capacity Development Project.
The clarification came at the time when the public was in a thick forest — not knowing who actually was supposed to bear the cost. While the minister has capitalised on his previous stance, various banks had already started circulating messages to their customers, directing that there will be new charges in relevance to government’s move to introduce the tax.

The ‘mystery’ deepened more when two government institutions –Tanzania Revenue Authority (TRA) and Bank of Tanzania (BoT) gave different interpretations relating to the new charges.

While TRA argued that the tax should be borne by the banks and financial institutions, the central bank maintained that customers should carry the burden.
The interpretation mismatch from the two institutions falling under the same ministry had even thrown the public into a tight spot, with others questioning why the minister was not immediately coming out of shell to shed the light.

Giving clarification to journalists in Morogoro yesterday, Dr Mpango insisted that customers were already being charged by banks and would, therefore, not be charged again.

In its place, he maintained his previous stance that the government will impose the tax on transaction fees charged by financial institutions. Principally, the burden of the tax falls to the final consumer while banks are only required to administer it.

However, economists put it clear that there was no need to charge customers the 18 per cent VAT because final consumers were already being subjected to transaction fees.

For instance, he said, a bank charges its customer 1,000/- transaction fee, the government will impose the 18 per cent VAT from the charge, noting that the transactions fees charged by banks were not something new.
Last week, TRA Principal Research Officer, Mr Beldom Chaula, said in Dar es Salaam that there has been confusion among the public on the said 18 per cent VAT.

He said some people have been misleading the public by saying that 18 per cent VAT on financial transactions will be charged from the amount that is withdrawn or deposited by customers. Instead, the TRA official said, VAT is charged from the set transaction fee.

“TRA does not charge tax from bank’s transactions or interests, the 18 per cent VAT is imposed on the transaction fee and not the whole deposited or withdrawn amount,” he explained.

Presenting the 2016/17 national budget in Dodoma last month, Dr Mpango proposed Value VAT on fee based financial services; a move he said will widen the tax base and increase government revenue. The proposal was later endorsed by MPs.

Enormous deposits of helium–estimated at 54 billion cubic feet–have been discovered in Tanzania’s Rift Valley and could relieve dwindling supplies of the rare gas, which is used in hospitals in MRI scanners as well as in spacecraft, telescopes and radiation monitors. “This is seven times the current global consumption,” said Professor Chris Ballentine of Oxford University, one of the researchers working on the project. “This is enough to fill over 1.2 million medical MRI scanners.”
The discovery, described as game-changer, is set to end concerns over a shortage of gas used in medical diagnosis equipment, mainly MRI and in rocket science. Some independent analysts say the recently discovered helium gas in Lake Rukwa could be worth $3.5 billion.
As scientists in the UK and Norway on Monday revealed the discovery of a large helium gas field in Tanzania, the government said it was not aware of the precious gas.the Permanent Secretary in the Ministry of Energy and Minerals, Mr Justin Ntalikwa, told the ‘Daily News’ in an interview that the government was yet to be informed on the new discovery.
“We don’t have any information regarding the discovery of that gas; those who have announced the discovery know it all,” said the PS. Up until now, helium has been mostly found accidentally during oil and gas exploration.
Helium is formed by the slow and steady radioactive decay of terrestrial rock. However, global supplies are running low, with warnings that supplies cannot be guaranteed in the long term.
Prof Jon Gluyas, of the Department of Earth Sciences at Durham University, who collaborated on the project, said the price of helium had gone up by 500 per cent in the last 15 years.
“Helium is the second most abundant element in the Universe but it’s exceedingly rare on Earth,” Prof Gluyas was quoted by the BBC News as saying. Tanzania Petroleum Development Corporation (TPDC) Managing Director Dr James Mataragio said his organisation had no mandate to deal with helium gas.