Sugar industry regulators and tax agencies in EAC have been involved in
frequent stand-offs over dumping of duty-free sugar within the region.
East African Community (EAC) council of ministers permitted
Tanzania to import 100,000 tonnes of sugar at a duty rate of 50 per cent
instead of 100 per cent between April and June 2015 while Rwanda was
cleared to import 70,000 tonnes at 25 per cent for a period of one year.
The council also imposed other conditions aimed at protecting
the sugar industries of other EAC economies including Kenya, Uganda and
Burundi.
“Rwanda and Tanzania should give first priority by sourcing
sugar from partner states that have excess production. During the period
of stay of application of CET (common external tariff), sugar from
Rwanda and Tanzania will attract CET rates when exported to other
partner States,” Harrison Mwakyembe, the chairman of the council of
ministers said in an EAC gazette notice.
Sugar industry regulators and tax agencies in EAC have been
involved in frequent stand-offs over dumping of duty-free sugar within
the region.
The feud has mainly drawn Kenya against Rwanda and Uganda with
the former accusing the two countries of abetting the malpractice that
renders its own millers uncompetitive.
At a meeting in Kampala in last July, Rwanda was reprimanded and
urged to step up surveillance on duty-free sugar imported into its
market to avoid dumping in other EAC countries.
Like Uganda, Rwanda was in 2011 allowed to make duty-free
imports to cover for a massive shortage of the commodity in its domestic
market due to drought.
Critics claim part of the imports into Rwanda later found their way into other EAC markets, hurting local millers.
In September last year, Kenya, Uganda and Tanzania agreed to
jointly collect custom taxes on sugar in an attempt to beat cartels
involved in regional dumping.
The three countries resolved to trade in sugar under the Single
Customs Territory (SCT) arrangement — which allows for joint collection
of customs taxes by the EAC partners — starting September 15,2014.
Under the SCT deal that began on last April, clearing agents
within EAC were granted rights to relocate and carry out their duties in
any of the partner States as part of a strategy to improve flow of
goods and curb dumping.
Importers covered under the SCT are required to lodge the import
declaration forms in their home country and pay relevant taxes first to
facilitate the export process.
The tax authorities in the respective countries would then issue
a road manifest against the import documents submitted electronically
by the revenue authority of the importing country.
In the 2015/16 budget, Treasury secretary Henry Rotich handed a
lifeline to sugar factories, on the verge of closing down due to
competition from cheap imported sugar.
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