Tanzania: Owners of large industries seek government protection against cheap imports

Dar es Salaam. Some owners of large industries in Tanzania have asked the government to protect them against cheap imports.

At least two large industries have already submitted their requests to the government asking for an increase in import taxes to shield locally-made products from undue competition from cheap imports, the minister of Industries and Trade, Dr Ashatu Kijaji, said during the official opening of the Saturn Corporation Limited-owned vehicle assembly plant in Kigamboni, Dar es Salaam, on May 9 2024.

Saturn Corporation has built the assembly line for Sinotruk’s Howo trucks. The assembly line started operations in March 2024.

Reacting to the request made by Saturn Corporation director, Rehamtullah Habib, during the ceremony, Dr Kijaji said her ministry was already working on the request from Saturn Corporation concerning the issue of charging higher import taxes on trucks.

Mr Habib had asked President Samia Suluhu Hassan, who presided over the ceremony, to allow an increase in import taxes on trucks from outside Tanzania to protect their huge investments and safeguard employment generated from the assembly line.

“We received a letter from this company asking us to raise the import tax on trucks assembled outside the country. We are working on the request knowing that we would not only be protecting our industries but also protecting your vision [for industrialising Tanzania],” Dr Kijaji said, addressing President Hassan directly.

She added; “In fact, we have also received the same request from Sapphire Float Glass (Tanzania) Co., Ltd., which you inaugurated last year. They want the government to charge more taxes on glass imports from outside the country to protect their investments,” Dr Kijaji told President Hassan.

Since the ministry of Industries and Trade plays the coordinating role, they have forwarded the tax issue to the Treasury for further action, Dr Kijaji added.

“We have a meeting planned with the Minister for Finance so that our colleagues dealing with fiscal policies can work on the fine details and advise you accordingly,” Dr Kijaji said.

The chairperson of the parliamentary committee on Industries, Trade, Agriculture and Livestock, Deodatus Mwanyika, who also attended the event, said the Parliament was ready to act to protect local industries.

“The investors have talked about the challenges they encounter. We, in Parliament, are ready to work with the government to improve the business environment in the country so that these investors can be Tanzania’s good ambassadors,” Mr Mwanyika noted.

In her speech, President Hassan did not address the import tax request directly but informed the gathering that the government has already reduced corporate taxes for vehicle assembly companies setting up shop in the country from 30 percent to 10 percent in the first five years of investment.

“The motive of the tax incentive is to attract more investment, increase employment, and make trucks easily accessible to the economy,” she noted.

Saturn Corporation, founded in 2021, assembles Howo tractor trucks, Howo tipper trucks, and Howo cargo trucks in its newly established assembly line in Kigamboni.

Mr Habib said that in the span of just about two months since the plant started operations, 150 trucks have been assembled and are ready for delivery.

“We already have orders for the trucks. But we were waiting for this official opening before we started delivering the trucks,” Mr Habib told the President.

The plant, which provides 250 direct jobs and 1,800 indirect jobs, has the capacity to assemble 30 tractor trucks and nine tipper trucks per day.

“We would be selling 70 percent of our trucks in the domestic market and exporting the rest,” Mr Habib noted.

Mr Habib asked for more land near their assembly plant to construct small industries that could reduce the need to import most of the raw materials.

“Our plant has a space of 24 acres. We are asking for 50 acres more nearby to be able to manufacture some of the inputs. That way, we will reduce imports for the inputs we need,” he noted.

Saturn assembles the trucks on behalf of Sinotruk of China, which is the original maker of Howo trucks.

It was a major dealer for Howo trucks for the eastern African region until it started assembling them inside the country.