Tanzania Slaps 25% Tariff on Ugandan Exports

By Patrick Jaramogi

Several Ugandan companies involved in manufacturing and exports of finished products are crying foul after Tanzania recently imposed a 25% tariff on manufactured goods entering its borders.

The new measures that were announced have pushed Ugandan manufacturers exporting into Tanzania to pay a 25% Common External Tariff (CET).

Uganda won concessions from her East African partners in the regional integration process to continue exempting its manufacturers from paying import duty on a list of 135 industrial inputs when the CET initially came into force in 2005.

Like the duty remission scheme, the list was supposed to lapse at the end of last year (2010) but was extended after sustained pressure from the countries' industrialists.

Exemption period

"Uganda got an extension of the exemption to the end of June next year. During this period the status quo is likely to remain so that manufacturers in Tanzania and other partners are not disadvantaged," said a Tanzanian Revenue Authority (TRA) official.

During the negotiation period for the EAC Customs Union, Uganda requested for a transition period of five years to enable the manufacturers enhance their capacity towards raw materials and intermediate products so as to remain competitive in the region.

At the time of the negotiations, Uganda had the lowest applied tariff rates in the region standing at 0%, 7% and 15% for raw materials, intermediate products and finished, manufactured products respectively.

The five-year transition period was meant to allow for the elevation of the infrastructure bottlenecks and for the removal of the Non-Tariff Barriers along the trade route.