Challenges easing transit transport regulations

03Oct 2019
The Guardian
Challenges easing transit transport regulations

MAKING the country’s investment climate competitive and among the best in East Africa and in the Southern Africa Development Community (SADC) is often easier to postulate than to actually set out conditions that aren’t just positively encouraging but also satisfy key stakeholders.

That is what the government has lately been facing, trying to sort out remaining bottlenecks in transit trade, where owners of fleets of lorries carrying imported goods especially to eastern Democratic Republic of Congo (DRC) and Rwanda form a major group. It was hard to tell proper competition issues and privileges.

There was also a problem of reference points in what actually is a competition issue, where for instance it was apparent that to be competitive the conditions under which transit trade or transportation takes place has to be identical or less constraining than the current least constraining routes. That is largely the case when the transporters that are being sought to use our roads for ferrying import goods can switch to other routes with little prejudice to their own costs. If on the contrary they stand to lose plenty it is clear they can bear with a slight increase on the cheaper route, as the switching is largely unfeasible.

What transporters were basically telling the government is that it should continue softening charges and harmonizing regulations for cargo transportation for the sector to be competitive. It means adopting the least charges route and long period of free transit without any charges, which means that the country essentially benefits from auxiliary services that the transporters will make use in having the lorries serviced and refilled in the country, part from excise duties in registering the lorries, etc. It means that transit trade makes our towns lively and petrol stations busier, and that is where we collect revenues.

These recommendations were being made at the annual general meeting of the Tanzania Truck Owners Association (TATOA) last week in Dar es Salaam, where the TATOA board chairperson lent some advice to the Tanzania Revenue Authority (TRA) and the Tanzania Ports Authority (TPA) to revise some regulatory provisions “that act as impediments to efficient operation of the sector, thus become setbacks for the sector to compete regionally.” For once, the transporters assert that the taxman needs to extend the free transit period to at least 90 days for bulk import cargo including fuel, and 120 days for export in order to attract bigger volumes of fuel, fertilizer and sulphur. They gave examples of South Africa and Mozambique which offer 180 days of free transit, making the two countries more competitive in the Southern Africa Development Community (SADC). The issue is do we directly compete with them?

Other suggestions like making use of discretional power provided in the East African Community Customs Management Act (EAC CMA) to waive custom warehouse rent on bulk cargo, as well as waiving the EAC Vehicle Load Control Act are set in the same direction, that we ought to be attracting as many transporters as possible, and collect revenue basically from the services to be provided or excise duty in registering the vehicles. These demands appear to most people to be privileges but it is true that is how globalization operates at present. The taxi service Uber makes a profit by getting a portion of the airtime surplus for Uber service callers, not from payments for the taxi services as such. It is really a challenge.

Top Stories