Tanzania: CTI urges more taxes for imported cement

20 June 2013

The Confederation of Tanzania Industries (CTI) wants the government to slap more taxes on imported cement to create a level playing field with local cement producers.

At a news conference in Dar es Salaam, the CTI Chairman, Mr Felix Mosha, expressed concern that highly subsidised imported cement is unfairly competing with locally-made cement, thus threatening local producers.
“Local producers can hardly compete with their foreign counterparts who are highly subsidised by their respective governments,” Mr Mosha told journalists.

The CTI’s Director of Policy and Research, Mr Hussein Kamote, noted also that while indicative price for cement is 100 US dollars per tonne in the world market, some countries are subsidising their producers to enable them sell the same at between 74 and 90 US dollars.

Even though he did not mention the countries that are subsidising their cement producers, it is a known fact that Pakistan has been highly subsidising its cement producers.

His sentiments were echoed by the CTI Executive Director, Christine Kilindo, who said she has information that some tax-exempted cement imported through Tanzania Investment Centre (TIC)’s approved projects is being off-loaded in the market.

“We need to strengthen monitoring of products imported for TIC projects since we lack mechanisms to ensure that exempted goods are used for the purposes intended,” she noted. The remarks by CTI comes a few days after revelations that cement importers are cheating the country of billions of shillings in taxes through under-declaration of quantity as well as freight on board (FOB) value.

Industry sources told this paper recently that there is a syndicate of three famous local companies (names withheld) that have been engaging in tax evasion through under-declaration of quantity and FOB.

Between February and April, Tanzania imported a total of 135,000 tonnes of cement through the ports of Dar es Salaam, Zanzibar and Mtwara to curb the shortage in the local market. Under the Common External Tariff (CET) of the East African Community (EAC), member states are required to charge import duty of 35 per cent on the quoted FOB of cement that is imported outside the region.

On the other hand, Mr Mosha said CTI has been engaging the Ministry of Finance to address cheating by some unscrupulous importers of cement among other commodities. “Smuggling and cheating of taxes by these dishonest importers will in the long run kill local industries since the former are not paying required taxes and as a result they out-compete local industries,” the CTI Chairman declared.


By Alvar Mwakyusa,

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