TASUPA argues that by so doing, it will reduce domestic demand for palm-based products in favour of sunflower oil.
It is also of the opinion that this shall produce long-term health benefits to Tanzania, on top of increasing internal sources of revenue and strengthening the value chain to sustain the market.
The suggestion is part of the findings in the Sunflower Facts Reports, June 2018 launched yesterday. The report also states that to avoid double taxation, sunflower cakes, the by-products of sunflower seeds should be exempted from produce cess and associated taxes.
Presenting the findings during the launch of the report, TASUPA Chairperson, Ringo Iringo said uneven application of VAT along the sunflower value chain significantly impact domestic downstream processing especially to small and medium scale processors.
“The study findings indicate that investment in the sunflower sub-sector has increased since the introduction of ten percent import duty on crude palm oil,” said Iringo.
He added that produce cess on sunflower cake in most local government authorities (LGAs) was introduced without passing by-laws and proper consultations between private and public sector.
The study uncovered that in most LGAs’ by-laws, sunflower seeds are subject to produce cess between 1,000/- and 3,000/- per bag of 60 kilogram, depending on the district.
“LGAs in Dodoma, Mbeya, Manyara and Singida regions introduced produce cess on sunflower cakes starting from 1,000/- per bag of 60 kilograms. However, these charges are not uniform across LGAs as they can be as high as 2,000/- per bag in some districts,” reads the report.
Study findings also observed that, at any point a registered sunflower processor have access to loan facility of up to 100,000,000/- or more in the bank account, TRA consider that as an income as opposed to working capital thus impose taxes.
According to the report, despite increase in the production of sunflower seeds in recent years, sunflower yield per acre among farmers appears to be low, which among other things result to shortage of quality seed stock for the downstream processors.
Speaking while officiating at the launch of the report, Director of Marketing at the ministry of Industries, Trade and Investment, Wilson Malochi said the government would use the report findings effectively to boost production in the sub-sector.
“The report is good and will help shape the sub-sector and increase its contribution to the economy,” said the director.