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A FAVORABLE business environment is essential to attract investors and for the development of trade and industry. Economists say that on the contrary, bad trading relationships can scare away investors.
The Zanzibar Chamber of Commerce of Agricultural Industries (ZNCCIA) continues to urge the island government and the government of the Union to create an environment conducive to business prosperity.
The members of the chamber declared that it was high time that the authorities act to save the few industries operating in Zanzibar, against competition from the mainland and other countries in the region of Africa. East, also on the way to the common market.
According to ZNCCIA, Zanzibar is flooded with goods from abroad. At the same time, the local industry is facing a lack of a reliable market for its home-made products, mainly because of the inconvenience of transporting goods to the mainland.
Discussing the challenges that producers face here, including the report on "the impact of excise duties on the production of soft drinks in Zanzibar", members of the business community say that while struggling to develop industries and create jobs, the government must ensure equal levels of play.
"We are uncomfortable with excise duties on non-alcoholic beverages (mineral waters, fruit juice, etc.) produced locally, as we can not freely export our products to the continent" said Khatib Ali, a trader.
"Our competitors on the mainland are free selling bottled water and other non-alcoholic beverages like fruit juice.In Zanzibar, why can not we access the market from the other side? of the Union? " he asks.
Finance Minister Khalid Salum Mohamed said that excise duties on locally produced products, including soft drinks, were legal and that all producers in Zanzibar and on the mainland paid the tax.
"Their complaint about the inconvenience they face in finding a market in Dar es Salaam and in other parts of the continent is genuine and has been taken into account.
Discussions are underway and we will soon have a solution to NTBs so that producers are free to sell anywhere in the United Republic of Tanzania, "said Mohamed.
In addition to the consultation between the respective authorities of Zanzibar and the Government of the Union, a special committee has been formed to deal with complaints on non-tariff barriers. It is expected to meet in December of this year.
The minister said the governments of the Union and Zanzibar are committed to developing industries to accelerate economic growth as well as poverty reduction through job creation for many young people inactive in the country.
The Minister of Industry and Commerce, Amina Salum Ali, said the government has improved the business environment by ensuring that favorable regulations and policies are in place, aimed at attracting more investors in industrialization, which means more jobs, manufactured goods and substitutes.
"We are working on unresolved complaints from traders, including the removal of inconveniences for the Dar es Salaam port market from accessing the Mainland Tanzania market," she said, asking producers not to not be discouraged by the delays.
However, members of the chamber indicated that the difficulties they faced in finding a market had existed for many years, which discouraged us from expanding our activities beyond Zanzibar due to the difficulties in the process. market access in Dar es Salaam and in other parts of the continent.
Hamad Omar Hamad, executive director of ZNCCIA, said the current industrialization plan aims to create a favorable environment for local investors and manufacturers, as well as to protect free trade in the United Republic of Tanzania.
He said the government should exempt excise duties on products manufactured in Zanzibar or ensure that traders here do not suffer unnecessary inconvenience to access the largest market in mainland Tanzania. This complaint has been around for a long time and it is high time to solve the problem of industrial growth.
"We thank the Prime Minister of the Union, Majaliwa Kassim Majaliwa, said the Executive Director of ZNCCIA, adding that the Ministers of Trade and Agriculture of Zanzibar and mainland were invited to meet and discuss issues that impede the smooth running of business in the country.
During a presentation to ZNCCIA members and members of the budget of the House of Representatives; Ussi Hamza Hussein, a consultant and lecturer at the Institute of Tax Administration, advised the parties to find a solution to pave the way for trade.
He added that the disadvantages of the port of Dar es Salaam and the excise duty on non-alcoholic beverages produced in Zanzibar can be solved amicably, as there is a good will in the promotion of local industries. .
Following a 2016 study on the above-mentioned grievances, the consultant concluded that it was not desirable to apply an excise tax (manufactured goods tax at the time of manufacture) to Zanzibar.
Hussein said the soft drinks had six factories, most of which began operating a decade ago. As of October 2015, the industry employed a total of 313 people, 72% of whom were men. It was also found that 79% of employees were permanent, while 21% were casual workers.
He said that during the reporting period (2010 to 2014), production in 2010 increased from 15.4 million liters to 17.2 million liters the following year, which corresponds to an increase of 11.6%.
Subsequently, production fell by 16.2% and 13.9%, before posting positive growth of 0.3% in 2014.
Part of the decline in performance was due to the closure of production at the Coca Cola plant in Zanzibar and lower demand for products due to competition from importing brands.
In accordance with Article 4 of the Constitution of the United Republic of Tanzania (URT) of 1997 which specifies the aspects of the Union listed in the first annex, TRA is the only institution endowed with a constitutional authority to manage national excise revenues in Tanzania, including Zanzibar.
He urged the government to reconsider its decision and organize a stakeholder forum with the private sector (soft drink factories and ZNCCIA) so that the government maintains its policy of promoting the industrial base, to discuss the issue in detail.
The revenue expert says that companies are operating today in a highly competitive global economy and that it is therefore important for them to have a local market allowing them to grow (power). to be competitive at the regional and global levels).
Advise on behalf of House committees on the budget; Mr. Mwinyihaji Makame Mwadini, Minister of Finance, Trade and Agriculture, said Zanzibar must create a business climate conducive to growth for all. "We can not talk about encouraging industrialization in the country while there are still barriers (non-tariff barriers) to growth.
We must have a win-win situation that benefits everyone in these difficult times to achieve development goals.
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