Kenyan confectionary to be taxed on entry to Tanzania

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Kenyan made confectioneries will no longer enter the Tanzanian market tax free after Tanzania began imposing levies on sweets from the country.
Tanzania has claimed that products such as chocolate, ice cream, biscuits and sweets imported from Kenya are all being made using zero-rated imported sugar which goes against an agreement made between the two nations in July 2018.
According to Tanzanian authorities, the use of zero-rated industrial sugar in the manufacturing of the confectioneries favors Kenyan industries more as opposed to their Tanzanian counterparts.
Tanzania and fellow East African nation Uganda had at the start of the year issued a 25 per cent tax on confectionery products from Kenya but following breakthrough discussions between Trade PS Chris Kiptoo and his Tanzanian equal Elisante Ole Gabriel a deal was struck on July 5, 2018, that would ensure Kenyan sweets entering the Tanzanian market would not be taxed.
However, following revelations by the Kenya Association of Manufacturers (KAM) chairman Sachen Gudka’s on Tuesday that confectionery from Kenya is still being taxed at the borders of East African nations, fresh trade wars are expected to erupt.
Mr Gudka speaking in Nairobi on Tuesday said that some products made from industrial sugar are still unable to access some of Kenya partner states at preferential rates.
He added that they are working with the East African Community (EAC) ministry to form a technical working group to find way forward on getting back to their preferential status.
Mr Gudka spoke after a meeting between EAC secretary Aden Mohammed and manufacturers at the Co-operative House in Nairobi.
The trade PS on the other hand attributed the tariffs on incompetency of junior government officials stationed at borders who fail to implement EAC policy.
In addition, the PS insisted that the matter could only be solved after the EAC secretariat facilitates bilateral talks between the two nations.
Mr Mohamed said that the (EAC) secretariat is supposed to take a strong leading role in addressing issues between member states.
He posed the question: “Why are we having member states having to resolve issues within themselves, yet we have a secretariat that should be empowered and has the authority to interpret the rules?”
Kenya, Tanzania, Uganda, Rwanda and Burundi make up the East African Community Market with the aforementioned states allowing unrestricted entrance of locally manufactured goods into their markets.
However, the introduction of tariffs has affected trade in the region with Tanzania also restricting easy access of Kenyan textile products and cigarettes which enjoy tax incentives at the Export Promotion Zones (EPZs) in Athi River.
Over the past three years, official statistics have shown that Kenyan exports to countries in the EAC market have dropped to Sh107.46 billion in 2017 from Sh120.04 billion in 2015.

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