Chairperson of Agricultural Council of Tanzania (ACT), Dr Jacqueline Mkindi showered praises on the government for coming up with one of the greatest budget in recent years as it offers incentives needed by investors eager to put their money in crop cultivation, livestock keeping and aquaculture.
“We are so grateful that this budget is skewed towards creating a conducive environment for agri-business to sprout. It is an incentive for the current and prospective investors in the agricultural value chains of livestock, fisheries and crop cultivation,” Dr Mkindi said while commenting on the budget last week.
She further noted that the budget will position the agriculture sector more appropriately to play its fundamental role of producing raw materials needed for industrial development. “As if that is not enough, the budget will shield domestic industries against unfair competition, enhance our products competitiveness in the regional and international markets,” explained Dr Mkindi who is also a Tanzania Private Sector Foundation (TPSF) board member representing agriculture cluster.
The ACT chief paid tribute to President John Magufuli’s last budget after his first five year term, because, among other things, it scraps off a record 60 nuisance fees and levies hence offering relief to majority investors in agriculture value chains who include smallholder farmers.
“The government’s move will improve the business environment, taking into consideration the impact of Covid-19 pandemic. This tax relief will translate into competitiveness of commodities,” noted Dr Mkindi who is also TAHA Group CEO.
She applauded President Magufuli’s response to the Coronavirus outbreak with careful restrictions introduced which allowed productive activities in the agriculture sector to continue without being disrupted.
Tanzania’s agriculture sector—which contributes nearly one-third of the country’s gross domestic product and employs 75 percent of the population, has potential to increase incomes and improve livelihoods. Experts have said that horticulture, fisheries, coffee, cotton and cashew have been hardest hit subsectors by the Covid-19 pandemic.
To relieve the sub-sectors, for instance, with the theme “stimulating the economy to safeguard livelihoods, jobs, businesses and industrial recovery,” the 2020/21 budget offered value added tax exemption on Agricultural Crop Insurance.
Dr Mkindi praised Finance Minister, Dr Phillip Mpango, Agriculture Minister, Japhet Hasunga, Hussein Bashe and Omar Mgumba for amending the VAT Act to enable exporters of commodities to recover input tax and enhance competitiveness at international markets as well as comply with VAT destination principle.
“We appreciate government’s efforts to waive duty on agricultural seed packaging materials to 0 percent instead of 25 percent,” the ACT Chairperson added.
The budget also contains a stay application of East African Community Common External Tariff (CET) rate of 25 percent and impose 35 percent duty for one year on imported horticultural products, a move intended to protect local farmers against unfair competition.
Exemption of custom duty on imported implements by person or entity engaged in horticulture, aquaculture and floriculture in order to promote growth of the sub-sector, is also another incentive granted by the new budget.
Mkindi also applauded Treasury for abolishing Occupational Safety and Public Health training fees of 250,000/= for each participant, saying that the provision of public education on safety and health is a core obligation of OSHA.
“Reduction of Skills Development Levy from 4.5 percent to 4 percent in order to relieve employers is among the key incentives to investors that will encourage expansion of businesses hence creating more jobs while creating wealth,” she noted.
She also lauded Minister of Livestock and Fisheries, Luhaga Mpina for abolishing loyalty of $0.4 per kg of targeted fish catches from deep-sea fishing and reducing export license fee on fish and associated products from fresh water bodies. The 2020/21 budget is effective next week Wednesday.