Tanzania Remove 15% Import Duty on Sugar for Industrial Use

The Commissioner-General of the Tanzania Revenues Authority (TRA), Alphayo Kidata, has announced that from 1st July 2021 the requirement of 15% import tax on sugar for industrial use will be waived.

The decision follows the 2021-2022 national budget recently approved that seeks to improve the business environment in the country.

According to the speech by the Tanzanian Minister for Finance and Planning, Dr. Mwigulu Lameck Nchemba, presenting the budget to parliament, this measure is intended to promote competitiveness and increase liquidity of domestic industries.

In addition, the introduction of the Electronic Tax System (ETS) will be used as a mechanism to track companys’ production and verify the use of industrial sugar.

However, non-compliant traders will be subjected to the previous measure on top of other existing legal measures.

The duty paid on sugar imports was increased from 10% to 25% in June 2015, in a bid to boost the competitiveness of locally produced sugar. 

Those importing sugar for industrial production (food, beverage and pharmaceutical production) were promised a 15% refund on their import duties, but this has not fully materialised. 

In 2018 the Confederation of Tanzania Industries (CTI) raised concerns over long outstanding import duty refunds and allocation delays for industrial sugar imports into the country.

In this regard, Kidata said that in 2020-21 TRA was supposed to reimburse TZS 57 billion to importers but so far they have paid out just TZS 37 billion and hoped to reimburse the remaining TZS 12 billion in July 2021.

The Tanzania Sugar Industry

Tanzania’s sugar annual demand is estimated at 710,000 tonnes in 2019 versus a local production of 439,100 tonnes in the same year.

Sugarcane farming and processing in Tanzania is very limited and cannot meet the national demand and the gap is filled with sugar imports.

In April 2020, the Tanzania Investment Centre (TIC) issued a notice inviting domestic and foreign investors to develop sugarcane and sugar processing plantations in the Kigoma region in northwestern Tanzania.