Several Ugandan businessmen with trucks that ply the Dar es Salaam-Mutukula route are protesting the continued high charges at the border, writes ALON MWESIGWA.
Have you ever wondered why many trucks carrying goods have foreign registration plates? The Observer has learnt that several Uganda truck owners prefer to register them elsewhere to avoid paying high levies at border posts.
The Observer recently caught up with a Ugandan petroleum retailer who preferred anonymity in order to give a first-hand account of the troubles Ugandan businessmen go through to transport goods through Tanzania. He intimated being part of a group doing this to avoid taxes.
He said he intends to buy 20 trucks to transport his oil products from the Tanzanian port in Dar es Salaam to Kampala. The aim, he noted, is to substantially reduce on the fees he has to pay to get his goods to the market.
Two options popped up: register trucks as Ugandan-owned and pay through the nose when going through Tanzania or register the trucks as Tanzanian-owned and pay nothing going through Tanzania and only a small fee when he reaches Uganda.
He has chosen to go with the second option. “If the trucks bear Ugandan plates, I will pay $500 (Shs 1.8m) per truck when I am going through Tanzania,” he said. “But I will only pay $50 (Shs 180,000) in Uganda when they bear Tanzania number plates.”
He intimated it is a common practice among Ugandan truck owners to cut transit fees when going through these countries.
“So many traders are registering trucks in Tanzania to avoid paying the high cargo transit fees,” he added. “Everybody is doing it; so, why should I be the one to pay $500 in Tanzania?”
The issue of registering trucks in foreign numbers means the country is losing taxes. When we put the scenario to Uganda Revenue Authority, there was no immediate answer. Ian Rumanyika, URA employee in the corporate affairs office, said he would have to inquire.
On the other hand, the Tanzania Revenue Authority (TRA) also loses out in this scenario. According to statistics from August 2016 to June 2017, TRA collected $12m (Shs 43bn) at Mutukula border post but that figure may drastically go down with the decrease of Ugandan-registered trucks.
The transit fee levied on cargo trucks is meant to help in the repairing of roads destroyed by the heavy vehicles. However, Ugandan traders say they are being treated unfairly.
Last year, the East African Business Council called for harmonisation of these fares. This would require that either Tanzania reduces its charges or Uganda has to increase what it charges trucks from Tanzania.
KIGALI VS DAR ES SALAAM
In 2013, the same issue sparked misunderstandings between Rwanda and Tanzania. Trucks from Rwanda were charged $500 to go through Tanzania while those from the latter were charged $152 to enter Rwanda.
Citing unfairness, Rwanda raised fees to $500 and stopped all trucks from Tanzania that did not want to pay before crossing the border. To stem the crisis, Tanzania reduced charges to $152 charged on Rwandan trucks to make the cargo transit fees uniform.
The distance from Rusumo border post between Rwanda Tanzania to Dar es Salaam port is 1300km. That from Mutukula to Dar es Salaam is 1450km. Ugandan traders say the distance is almost the same and see no reason they should be paying a much higher fare to access Tanzanian port than counterparts in the region.
The squabbling on the transit cargo fees is just one of the contradictions confronting the East African Community (EAC), a bloc supposed to facilitate trade and cooperation with the parties. The non-tariff fares and treatment of traders in member states show there is still a long way to go.
Already tensions are high over Tanzania’s burning of 6,400 live chicken from Kenya claiming it had bird flu. Also tens of herds of cattle from Kenya were confiscated in Tanzania and Dar said its territory was not grazing ground for Nairobi.