The unspoken pain of Kenyan companies in Tanzania

Business environment from Namanga border point, all the way to Dar, has not given local firms an easy time. PHOTO | FILE | NATION MEDIA GROUP Many companies will not overtly go on record to state their pain, thanks to neighbours’ morbid fear of competition, but the suffering is real.

Business environment from Namanga border point, all the way to Dar, has not given local firms an easy time, with uncertainty looming over the next possible negative action by authorities.

Though many Kenyan companies doing business with Tanzania may not publicly admit it, they are caught up in a cold war that threatens to freeze them out.

They accuse the neighbour of being averse to competition, and any sense of losing out results in arbitrary introduction of charges that ensure Kenyan products attract higher prices.

Tanzanian has banned some services offered by Kenyan firms and introduced trade barriers that favour local competitors while frustrating the latter.

These frustrations are contained in annual reports and financial statements of many companies pointing to a trade war far from over, but which no one wants to admit overtly.

Carbacid Investments Limited, which exports Carbon dioxide (CO2) to Tanzania is one of the companies, whose operations were hit by introduction of new policies.

Carbacid Chairman Dennis Awori told Smart Company that the Tanzania Revenue Authority (TRA) increases the selling price of imports whenever it realises that the goods are cheaper than those produced there.

He said TRA creates regulatory requirements that end up raising the cost of operations in the country if it does not have the mandate to hike the price directly.

“TRA will arbitrarily increase the value [selling price] of our exports [to Tanzania] should they perceive that the imported goods are undervalued. They claim we collude with Tanzanian customers to avoid paying the correct taxes,” Mr Awori said in the interview.

Although CO2 exports to Tanzania do not attract customs duty or export tariffs, non-tariff barriers such as a chemical transport licence for vehicles ferrying it, a permit for the same, food and beverages imports and a mandatory inspection and verification on exports at loading points and Inland Container Depot (ICD) by TRA have been introduced, Mr Awori said. POLITICAL STATEMENTS A keen eye will reveal political battles between Kenya and Tanzania, he said, claiming, there is a plan to lock some Kenyan businesses out of the market.“Tanzania’s macro-economic environment presents challenges for Carbacid exports into the […]

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