Posted on November, 23, 2018 at 10:16 am
By ABEL MUHATIA
Kenya has rejected a second request by Tanzania to carry out a verification of the sourcing of industrial sugar by Kenyan confectionery factories.
"Kenya protests the contents of the letter from Tanzania Revenue Authority, dated November 14 ,2018 whose content impugns Kenya’s integrity based on media reports...Kenya demands that the letter be expunged from the records of the Community," the document reads.
Local confectionery firms producing sweets, juices, ice cream and chewing gums say they have been denied duty-free access to Tanzania for seven months now over alleged use of zero-rated industrial sugar imports.
In documents seen by the Star, Kenya demands that the request be suspended from East Africa Community records.
Kenya’s position is that Tanzania accords community market access as per the findings of the first verification report without further hindrance or conditions.
In April, Uganda and Tanzania claimed Kenyan confectioneries took advantage of mismanagement of a one year zero-rate duty remission scheme for table sugar from last July to ship in industrial sugar.
This saw the two countries slapping Kenya with a 25 per cent duty on Kenyan products.
The six EAC nations import refined industrial sugar under a uniform 10 per cent duty remission scheme.
In June, Tanzania carried out the first verification exercises which was supervised by EAC Sectoral Council on Trade, Industry, Finance and Investment.
However, five months later, Tanzania is proposing the matter be taken back for fresh consideration to Tanzania and Kenya revenue authorities.
This is despite confirming in June that Kenya confectionery producing firms did not benefit from sugar imported under zero duty. Findings of the first verification exercise confirmed the same.
The secretariat asked partner states to accord preferential tariff treatment to Kenyan manufactured confectionaries. Further, during the May sectoral meeting,the secretariat directed Tanzania not to charge stayed tariffs. Uganda heeded the call but Tanzania reported that they have reservations on the findings.
A meeting held last week in Arusha between the partner states has revealed that the secretariat agreed to escalate the issue to the EAC Council of ministers
However, until then, Tanzania maintains that it will continue to charging the 25 per cent import duty in addition to a Railway Development Levy of 1.5 per cent.
It also imposes the Tanzania Food and Drug Authority 1.5 per cent Freight on Board import levy.
The levy is charged for transferring products into Tanzania from other partner states.
Kenya has threatened to subject the same treatment and charges to Tanzania Food and cosmetics products until Tanzania drops the levy.
EAC has established a regional task force to analyse all the fees and charges applicable to food, drugs and cosmetics and make appropriate recommendations by March 2019.
Source: The Star