Businesses in Kariakoo count losses as traders stage protest

Dar es Salaam. Businesses at the busy Kariakoo area were counting losses yesterday, following a decision by traders to close their shops in protest for a number of factors by some government agencies which, they said, were affecting their businesses adversely.

The traders announced early yesterday that their shops would remain closed until the government works on their grievances which included bureaucracy at the Dar es Salaam port and seizure of their goods as Tanzania Revenue Authority (TRA) implements the new legal provision on registration of storage facilities.

They also demand that they be granted the freedom to do business and thus pay the right amount in tax without being coaxed into bribing TRA officials.

The decision by TRA to start legal provision on registration of storage facilities followed the endorsement of the Finance Act, 2022 which amended Section 45A of the Tax Administration Act, 2015, to require any person who establishes a storage facility with the aim of keeping goods for business purposes to register the facility with the Commissioner General.

With the implementation of the requirement commencing on 1st July 2022, TRA held a training session on May 10, 2023 where it clarified that the storage facility referred to a space/building/room utilized in any business for the storage of goods/products for sale and that a space used to store raw materials or goods that were not directly sold in the business would not be considered as a storage facility relating to the provision.

That notwithstanding, the strike brought businesses to a standstill at Kariakoo yesterday, affecting both Tanzanians and traders from the Democratic Republic of Congo (DRC), Zambia, Malawi, Rwanda, Burundi and partly Uganda who use the area [Kariakoo] as the main gateway to their countries.

Mr Jackson Mathias, who is an officer at Defenete Investment Company, which is a banking and mobile money agent located at the junction between Msimbazi and Aggrey streets, told The Citizen yesterday that he closed the shop without making any transaction yesterday.

He said during normal days, the company makes up to Sh100 million in financial transactions inn its role as a banking and mobile money agent.

“We also do between nine and 10 transactions on the MoneyGram platform per day, mostly from foreign nationals who come to buy their merchandise here,” he said. He advised the government to sit down with the traders and listen to their needs because nothing was impossible through negotiations.

An agent at the junction between Msimbazi and Mhonda Street, Mr Cyprian Kway, said his biggest customers were shop owners, saying the strike meant a loss to him because no serious transactions was being made except those who were in need of small amounts like buying airtime. "These days, people don't carry cash at all and for them to withdraw money from their accounts through us, they need the assurance that they will get services to avoid risks. If you go to the banks here today, you will realize that they do not have customers because most of those [customers] that they get are those who go there change foreign currency," said Mr Kway. He said the government needed to sit with the stakeholders to solve the identified challenges which have proved a challenge on their part. “If no business is done here at Kariakoo, the loss to the government is huge. Besides, Kariakoo also receives foreign national who come to buy their merchandise here and some of them come with visas…In short, the whole chain has been challenged,” he said. A banking and mobile money agent at Narung'ombe/Kongo street Mr Ebenezer Werema said he had not done any business at press time yesterday and feared that left unchecked, the situation would affect his commission at the end of the month.

Left to prolong, the strike would also affect government revenue, with latest data showing that the Kariakoo Tax Region bringing a total of Sh127.442 billion into government coffers during the first nine months of the current fiscal year.

And yesterday, it proved difficult for the Dar es Salaam Regional Commissioner (RC) Amos Makala to avert the strike when he led a team of government officials including TRA and other senior government officials to the meeting with Kariakoo traders.

Even after addressing traders, asking them to resume normal operations pending discussions that would be held on Thursday between their leaders and Prime Minister Kassim Majaliwa at Parliament in Dodoma for permanent resolution of their challenges, traders maintained their position to close their shops.

However, the Kariakoo stalemate was resolved by Prime Minister Majaliwa after travelling from Dodoma to meet representatives of traders.

Addressing traders after the meeting, Mr Majaliwa said TRA task force is suspended because it was the ones behind arbitrary arrests complained by traders.

“TRA commissioner of domestic revenues, temporarily suspended the task force. The minister (Finance and Planning) should be aware if the task force is necessary,” he said.

“The issue will be discussed in detail during a joint meeting slated to take place at the Arnautoglu Hall on Wednesday,” he added.

Mr Majaliwa said laws and regulations should be followed to boost revenue collection, noting that arbitrary arrests kill businesses and scare traders from neighbouring countries.

“Provision of education on tax revenues should be strengthened to make Kariakoo Market retain its international status,” said Mr Majaliwa.

The premier who doubles as Ruangwa Constituency Member of Parliament directed the commissioner of domestic revenues to prepare appropriate procedures to implement the stores registrations.

According to him, traders could be paying tax for commodities jointly imported, making it difficult to provide receipts to everybody whose cargo was included in the container.

“You (TRA commissioner of domestic revenues) are the one accepting this system, however it hurts traders. Properly organize yourself and crack your head over the issue to avoid possible corruption associated with it,” he said.

“Registration of Storage Facilities Act had good intentions, but we could have made a false beginning probably without providing education. Let’s organize ourselves using the best means of implanting the law,” he added.

The premier said failure to abide by directives of top government leaders (President, Vice President and Prime Minister) was insubordination that needed to be avoided at all costs.

“Regarding cargo levies, assessment is claimed to be unrealistic. TRA workers should properly inspect cargoes and prevent making over assessments which leads to corruption,” said the premier.

Mr Majaliwa finally agreed with traders that businesses will resume to normalcy immediately after the meeting pending the Wednesday meeting that should also include leaders of traders from Mbeya, Arusha, Tanga, Mwanza and Dodoma regions.

“Open the shops on two grounds. The first is that this is an international market, therefore, we should avoid discouraging foreign traders as we internally resolve our challenges,” he said.

“Leave to the government all the challenges that are caused by our people in government. The government aims at ensuring that every Tanzanian who has decided to invest in business is facilitated to do business,” he added.

During Wednesday's meeting, Mr Majaliwa said he will be accompanied by the minister of Finance and Planning Mwigulu Nchemba, Industry, Trade and Investment minister Ashatu Kijaji and several others.

Earlier, the Kariakoo traders’ chairman, Mr Martin Mbwana, told the premier that unrealistic cargo assessment, TRA crackdown through task force and corruption were among challenges facing Kariakoo traders.

“TRA has refused to honour the President’s directives issued in Kagera Region about tax arrears saying they were merely political statements and demanded a letter from the Head of State to support what had been said,” he said.

Debate in Parliament

Makete Constituency legislator Festo Sanga who was supported by Special Seats Member of Parliament (MP) Hawa Mwaifunga took the docket minister Kijaji to task when they sought Speaker Tulia Ackson’s approval for Parliament suspension to debate ongoing unrest in Kariakoo.

When Dr Ackson asked the minister to issue a statement on the Kariakoo situation, Dr Kijaji said, “There are traders who used their freedom to open their shops, while others used similar freedom to close their sprees. They are democratically doing so, nobody is forced to do anything.”

According to her, discussion between the government and traders was underway, noting that the Parliament will be informed on the development.

However, the minister was making the statement as the shops remained closed at the Kariakoo Market.

In her conclusion remarks, Dr Ackson said she was collecting enough information about the issue.

Shoppers given alternatives

Following disruptions of services at the Kariakoo Market, shoppers were yesterday advised to shop from petty traders alias machinga at retail prices.

They could also use e-commerce, alternative markets in Sinza, Tegeta, Mbagala Rangi Tatu, Tandika, Mwenge and Kigamboni.