Tanzania government officials, traders locked up in talks as Kariakoo shops remain closed

Dar es Salaam. A significant number of shops in Dar es Salaam's primary commercial hub, Kariakoo, remained closed on Monday, June 24 as traders pressed the government to address their grievances.

This left nationals from neighbouring countries, who typically purchase merchandise there, stranded.

A few traders dared to open their shops, arguing that the reasons for the strike were illegitimate.

The Dar es Salaam Regional Commissioner, Mr Albert Chalamila, who visited the shopping hub on June 24 to assess the situation congratulated those who opened their shops.

"I came here to see what was going on. I congratulate those who have opened. Those who have closed their shops should not bother others. The government will take action against anyone who disrupts the business operations of those who have opened," said Mr Chalamila.

As of press time on June 24, negotiations between representatives of the traders and government officials were still ongoing in Dodoma as they sought to find a lasting solution to the outlined concerns.

On Monday evening the government said that it was suspending inspection activities for the electronic fiscal devices (EFDs) and electronic tax stamp activities carried out by the Tanzania Revenue Authority (TRA) through the Kariakoo Tax Region.

The minister of State, President’s Office [Planning and Investment], Prof Kitila Mkumbo, said the exercise will be conducted through a proper procedure that was being prepared for Kariakoo-based traders.

He outlined some resolutions from a meeting between the traders’ leaders and the government.

The meeting, convened by the minister of Finance, Dr Mwigulu Lameck Nchemba, was also attended by the minister of Industry and Trade, Dr Ashatu Kijaji, and other senior government officials.

Last Friday, an unsigned flyer was circulated on social media, urging businesspeople in Kariakoo, Dar es Salaam, and other parts of the country to keep their shops closed indefinitely from yesterday (Monday) until all their grievances had been addressed.

However, on Sunday, leaders from traders’ associations said they would not support any strike by businesspeople that will take place today.

The group's national chairman, Mr Khamis Livembe, who chairs the Tanzania Business Community, told The Citizen on Sunday that there is no need for a strike because the government has promised to work on their demands.

A spot check at Kariakoo yesterday showed that the otherwise busy trading hub was quiet, with very few activities going on.

Speaking to The Citizen yesterday, a trader, Mr Andrea Macha, said that they have not seen any reason to close the shops because the flyer that was being circulated was fake.

“As a leader in this area, I have urged my colleagues to continue with their business activities. We have also issued a notice to the police here at Msimbazi so that we can seek their assistance if needed,” he said.

"Every businessperson in Kariakoo has their own goals. We have loans to repay, and halting our activities could lead to preventable losses. If we joined those with large capital, our ability to expand our businesses would be hindered. Therefore, we will remain open at all times," he said.

The closure of shops, however, dealt a heavy blow to foreign nationals who come to Dar es Salaam’s Kariakoo area to buy their merchandise.

“We don't know how long this strike will last. Some of us need to return home with the money we intend to spend here in Tanzania already depleted. We will have to find other alternatives because we have already taken customers' orders,” said Ms Keli Makwira from Harare, Zimbabwe.

She said Zimbabwean businesspeople prefer buying goods from Kariakoo due to the affordability of prices and the high quality of the products.

Additionally, she noted that Kariakoo is known for its stability and low rates of theft compared to commercial centres in other countries.

"The government of Tanzania needs to address the traders' challenges to ensure the continuation of business activities... I came here on Friday, planning to buy my goods and return to my country, but with the closure of shops, I have wasted $400 on a ticket and am going back without the products. This is not fair," she complained.

For his part, a businessperson from Lubumbashi in the Democratic Republic of Congo Mr Gideon Lukusa, said the biggest challenge was that TRA was confiscating traders’ merchandise until they paid substantial fines.

"A week ago, my goods were seized by the TRA. We do not like violence, and we come to Kariakoo to conduct business because of the quality products available. The government should address the challenges faced by Tanzanian businessmen," he said.

Traders want the government to put all taxes in a single collection basket.

They also want fines for violations of the tax code reduced to the level of traffic offences.

They also argue that the requirement to issue receipts should not be treated as another form of taxation, as it is being used as an excuse to harass them.

They are urging the TRA to halt the practice of seizing their goods and to stop refusing to accept financial statements prepared by registered accounting professionals.

Traders are also advocating for foreigners engaged in small-scale trading activities in Kariakoo to leave the country.

They are further insisting that value-added tax should only be collected from manufacturers and at entry points such as airports and sea ports, rather than the current system where tax authorities collect it directly from shops.

The collection of withholding tax is also a contentious issue, according to the traders.