Sunflower processors praise govt move to scrap VAT on edible oil

By Paul Mabeja , The Guardian
Published at 01:31 PM Jun 19 2024
Edible oil
Photo: File
Edible oil

THE Tanzania Sunflower Processors Association (TASUPA) has hailed the government's move to scrap value-added tax on locally produced edible oil, saying this will encourage investment in agro processing and increase productivity.

The association also lauded the government’s decision to start charging excise duty on imported edible oil.

Ringo Iringo, TASUPA chairman made the remarks here yesterday when speaking to journalists on the action taken by Finance Minister Dr Mwigulu Nchemba when tabling the national budget of 49.35trn/- for the 2024/2025 financial year in the National Assembly recently.

"It should be remembered that agriculture provides employment opportunities for the majority of Tanzanians, especially young people and women. Investment in value-adding industries will increase the scope of our country's produce markets,” he said. 

“To tax value addition of crops is to weaken efforts to build an industrial economy, to discourage investment in value addition and to facilitate export of our crops as raw materials and to turn our country into a market for agricultural goods with added value from other countries.”

He also commended the decision to start charging customs duty on imported cooking oil at 25/35 percent or $250 per tonne for crude oil or $500 per tonne for refined edible oil.

"We advise the government to use a charging system of $250 and $500 per tonne rather than a percentage because there has been a tendency to lower the purchase price for importers to reduce taxes and customs duty they are supposed to pay," he said.

Iringo said there is positive response by the private sector, in terms of investment by sunflower farmers and sunflower oil processors, adding that cultivation and processing take place in a total of 23 regions in Tanzania Mainland while processing investment stands at 773 factories with one large processing plant and 19 medium ones and 753 small-scale ones.

He said that the factories can process a total of 5,000 cubic tonnes per day, thus requiring 1,800,000 cubic tonnes of sunflowers per year.

“While the country's need for edible oil is estimated at 570,000 cubic tonnes, if edible oil processing factories work at 100 percent, then they are capable of producing 540,000 cubic tonnes of edible oil from sunflowers alone,” he said.

He said TASUPA, promises the public that by 2027 shortage of edible oil in the country will be history.

“By that time we will start exporting to neighbouring countries where there is huge demand such as the Democratic Republic of Congo and the Comoros.