Deterrent taxes await oil imports

DETERMINED to realise his industrialisation drive, President John Magufuli yesterday ordered heavy taxation of imported crude oil parallel to reduced taxes on the country’s industrialists.

He tasked two ministers to devise the best strategy to reduce nuisance taxes that haunt industrialists in the country. Dr Magufuli directed Trade, Industry and Investment Minister Charles Mwijage and his counterpart in the Finance and Planning portfolio, Dr Philip Mpango to meet and amicably deliberate on solutions to reduce taxes on industries that create many job opportunities for Tanzanians.

The Head of State also directed Tanzania Revenue Authority (TRA) to impose heavy taxes on imported“There has been a dirty game by crude oil importers, because TRA does not tax raw materials, all that businesspeople do is to import finished products, repackage and offload them into the market, making super normal profits,” he revealed.

The only way to check the tax evasion, is to subject imported crude oil to exorbitant taxes, Dr Magufuli said in his speech in Singida region where he officially launched Mount Meru Millers Limited, a sunflower factory, which will produce 90,000 tonnes of cooking oil upon completion.

He condemned a crosssection of businesspeople who have for a long time been organising themselves and travelling to the political capital, Dodoma, to lobby parliamentarians to spare crude oil from taxation. “I was legislator for 20 years... and I well know that there have been dirty games,” he hinted. Dr Magufuli underscored the need to protect local industries to create more jobs for Tanzanians.

“My party tasked me to create enough jobs and that is why we need more investors in the industrial sector, with massive employment opportunities,’’ he said. According to Mr Mwijage, Tanzania imports 450,000 tonnes of oil and that 30 per cent of that was sunflower oil. He said the country has 3,306 industries, with Singida region alone boasting of 543 factories, mostly sunflower related, which account for 70 per cent.

President Magufuli decried excessive importation of edible oil although the country has enough raw materials that can help to produce the product, domestically. He said that the country’s population was increasing at an alarming rate, adding that the country will in future need 500,000 tons of oil, which will necessitate an increase in factories to boost production.

“We should create an environment for more industries in the country and if we do not make immediate action now we will be late,’’ he added. Earlier, Mount Meru Millers Limited Director Atul Muttal said upon completion of construction works, the 90,000-ton capacity factory will create up to over 1,000 jobs. “We sell our products in the domestic and export markets...and we have always been ensuring that we produce products that are of the best quality,” he said.

According to Mr Muttal, the company is a leading manufacturer of quality edible oils from multiple oil seeds like sunflower, soya, cotton and sesame. “These vegetable oils are a superior choice over imported palm oil, which has an especially high concentration of saturated fat that subjects consumers to high health risks,” he said