Industries impress EPZA
A study conducted on ten selected industries granted tax exemptions totalling 63bn/- during the last ten years by the Export Processing Zones Authority (EPZA), has shown that the factories indirectly paid revenues amounting to 73bn/- during the period.
“We conducted a cost benefit analysis on the selected industries and found out that they actually paid more than what they were exempted, not to mention other benefits to the economy,” the EPZA’s Acting Director for Investment Promotion and Facilitation, Mr James Maziku, has disclosed.
It is on this backdrop that the executive suggested that authorities charged with issuance of the waivers should conduct thorough studies on whether such incentives help to stimulate the economy as intended, stressing that administration of the waivers was a challenge.
According to the official, the tax waivers granted to the industrial units included import duty, corporate and Value Added Tax (VAT).
“Even with the incentives, the firms were subjected to charges at the Dar es Salaam port, payment to utilities such as water, electricity and communications. The 73bn/- was paid in form of other taxes and charges,” he explained.
Mr Maziku made the explanation in response to questions by journalists after his presentation to a delegation of officials from Mkuranga District Council who are on a three-day training at the Benjamin Mkapa Export Processing Zone at Ubungo External in Dar es Salaam.
“In the study, we found out that the firms earned the country about 400bn/- in foreign exchange from the exports. It should as well be understood that exemptions granted by the EPZA have a life span of ten years only,” Mr Maziku observed.
EPZA is charged with boosting the country’s exports, enabling technology transfer and attracting new investments which eventually create job opportunities.
“We have to sacrifice as a country in order to gain, for instance the industries we made the study on spent 53bn/- to secure raw materials and 9bn/- on other expenditures, and this was due to the fact that they were encouraged to invest in Tanzania because of the tax waivers,” he remarked.
The Mkuranga District Council Engineer, Wilfred Gutta, said the three-day training will enable officials from the district to make planning for establishment of special and export economic zones.
“Many investors are now flocking in Mkuranga given a number of investment opportunities there. It is our aim to put in place favourable infrastructure to facilitate them,” he explained.
Eng. Gutta said Mkuranga boasts of vast openings for investment, namely adequate land, long coast line along the Indian Ocean as well as accessibility through the Dar es salaam-Mtwara highway.