KENYA – Kenya has agreed to resolve the matter pertaining to denial of duty free access of wheat flour from Tanzania.
The East African Community Sectoral Council on Trade, Industry, Finance and Investment (EAC-SCTIFI) that met early this month in Arusha, Tanzania took note that Kenya had agreed to resolve the matter as soon as possible.
“The Secretariat was aware of the issue and that as an operational matter can be resolved at that level since wheat flour qualifies to be accorded community tariff treatment,” stated East African Business Council (EABC) Trade and Policy Brief for February, 2017.
Last month, DPL Festive Limited ordered 40 trucks of wheat flour from Said Salim Bahkresa and Company Limited.
Unfortunately after all entries for 40 trucks were passed and approved by Kenya Revenue Authority (KRA) officer in Namanga, an order came from the Head office re-directing all the trucks to be held back or pay full duty of 50 per cent.
The KRA decision came following Kenyan millers’ accusation to Kenya officials at the borders of letting zero-rated wheat from Tanzania enter the country, yet Kenyans pay up to 50 per cent duties when exporting their products to East Africa including Tanzania.
The Kenya-Tanzania borders of Namanga, Loitokitok, Lunga Lunga and Isibania (Sirare) have been named the notorious cross points in the trade.
“If we export to other countries we pay taxes, but Tanzanians are bringing in zero-rated wheat products. We have at least 10 trucks from Tanzania every day,” Cereal Millers Association said.
Tanzania imports its wheat, hence should not enjoy tax incentives under the East Africa Community Customs Union rule of origin, which gives preferential treatment to locally produced goods.
“We need equal treatment. We can only do this by making sure duty is paid on Tanzania wheat flour. Informal imports brought in through the borders are affecting Mombasa and Nairobi,” they said.
Kenyan millers are supporting local farmers by buying 10 per cent of their stocks locally. This has made Kenyan products more expensive giving Tanzania an edge over Kenya.