Kenya raised concerns over Tanzania’s consistent blocking Kenyan businesses access to the Tanzanian market. PHOTO | FILE |
What you need to know:
Nairobi raised concerns over Tanzania’s consistent blocking Kenyan businesses access to the Tanzanian market by subjecting Kenyan manufactured goods to numerous requirements and high levies, making them too expensive to compete in the Tanzanian market.
Tanzanian side raised concerns over strict measures Kenyan authorities have imposed on their investors and high fees by Kenyan authorities at the border points.
Kenya requested a reduction in work permit fees by Tanzanian for small and medium sized companies.
Tanzanian President Jakaya Kikwete’s recent visit to Kenya helped to resolve a number of disputes, which could see businesses in the two countries making massive gains.
As President Kikwete and his host President Uhuru Kenyatta made public appearances, bilateral talks by the respective Ministers for East African Community, Trade, Agriculture and Livestock, Information and Communications and Foreign Affairs were going on behind the scenes to thrash out thorny issues that are hindering trade and free movement of people and services between the two countries.
A report on the bilateral talks, seen by The EastAfrican, indicates that Nairobi raised concerns over Tanzania’s consistent blocking Kenyan businesses access to the Tanzanian market by subjecting Kenyan manufactured goods to numerous requirements and high levies, making them too expensive to compete in the Tanzanian market.
The protectionist measures, the Kenyan ministers said, were against the spirit of the East African Community Common Market Protocol.
The Tanzanian side raised concerns over strict measures Kenyan authorities have imposed on their investors and high fees by Kenyan authorities at the border points.
According to the report, Kenya complained that while it allows a stay period of six months to Tanzanian citizens in the country as required by EAC Common Market Protocol, Tanzania allows Kenyan citizens only a three months stay. In addition, while Kenya provides gratis visas to Tanzanian students, Kenyan students are required to pay $100.
“The yellow fever certificate required by Tanzania is still an issue that needs to be addressed so as to facilitate easier movement of labour and services across borders,” the report reads.
Kenya requested a reduction in work permit fees by Tanzanian for small and medium sized companies.
While Kenya has eliminated fees for all East African citizens, Tanzania has increased work permit fees for all foreigners.
Kenyans seeking work permits in Tanzania pay between $2,000 and $3,000, which puts investments by small and medium companies at risk as most may not be able to pay the increased fees considering their low turnover.
In its response, Tanzania said harmonisation of work permits and visas and other travel documents by the EAC partner states is still in progress and Tanzania is keen on ensuring that this is implemented once finalised.
Whereas East African students pay the same tuition fees as Kenyans in Kenyan institutions of higher learning, Kenyan students in Tanzanian universities are charged like other foreigners.
While university tuition fees range between $650 and $1,000 for Tanzanian students, Kenyan students pay between $2,700 and $5,700 for similar courses.
“The process of harmonising the EAC education system is still on course and once it is completed, Tanzania will implement it as required by the Treaty,” noted Tanzania in its response.
On free movement of people and services, Tanzania raised concerns over the strict measures Kenyan authorities impose on trucks carrying products from Tanzania and a road toll of per truck especially at the Kenya-Tanzania border.
The ministers added that Tanzanian companies operating in Kenya have been finding it difficult to get work permits, and this has greatly restricted the movement of professionals, especially in the service sector.
The Kenyan business community has long complained that Tanzanian Revenue Authorities do not recognise the certificate of rules of origin issued by the Kenya Revenue Authority.
Subsequently, the Tanzanian Customs authorities charge the full common external tariff on goods manufactured in Kenya, denying them preferential treatment and duty free market access. Kenya proposed that the Tanzanian authorities recognise the certificate of origin necessary for cross border movement of goods, since it is becoming a non-tariff barrier to trade.
Some of the products affected include salt wholly produced in Kenya, some alcoholic brands like Smirnoff ice, plastics and motor vehicles assembled in Kenya.
Goods in transit from Kenya to Malawi, Zambia and Democratic Republic of Congo through Tanzania are also subjected to 100 per cent verification at the Namanga and Kasamulu border, which causes delays. This move is against the World Trade Organisation’s trade facilitation agreement, which provides for freedom of movement for goods in transit without verification.
Manufactured goods from Kenya are taxed twice as they cross borders. The VAT and excise duties are charged at the point of production and consumption. These distortions are hampering competitiveness of goods and services. The EAC provisions on avoidance of double taxation are yet to be adopted by member states.
The Tanzania Revenue Authority still requires retesting and registering of food and cosmetic products entering Tanzania even when the products have been certified and registered by the bureau of standards in the country of origin.
Despite the EAC June 2014 gazette notice where the EAC agreed to introduce on infrastructure levy of 1.5 per cent on imports into the EAC, Tanzania has introduced a 1.5 per cent levy to imports from Kenya and other EAC countries in their TRA circular dated June 22.
Tanzania on the other hand reported that Kenya has placed restrictions on flowers from Tanzania in transit through Kenya’s Jomo Kenyatta International Airport to Europe.
The ministers agreed that the issues will be dealt with at the joint EAC Joint Commission for Co-operation on Non-Tariff barriers meeting in January.
“The meeting was to be held next month but due to the elections in Tanzania, the meeting has been postponed to January to give Tanzania ample time to prepare,” said a Kenyan official, who asked not to be named.
